The Scam Verdict on Bitcoin Online Wallet & Crypto Exchange

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When it comes to fraud involving Bitcoin, the advantages of cryptocurrency are used in a way that is detrimental to the victims.

A new analysis discovered that scammers stole a total of $14 billion worth of cryptocurrency in 2021, making it the most profitable year on record for cryptocurrency theft. According to the “2022 Crypto Crime Report” published by the blockchain data firm Chainalysis on January 6, 2019, the findings from this report showed that scammers stole nearly twice as much money in 2022 as they did in 2020, which was $7.8 billion.

According to William E. Quigley, a prominent investor, and co-founder of the WAX blockchain, “Olympic-level scammers” have taken notice of new opportunities for illicit activity since there has been a boom in interest in cryptocurrencies over the past year. It is no wonder that “Olympic-level scammers” have taken notice of these new opportunities. 

During a panel discussion that was held by blockchain company Light Node Media a month ago, Quigley stated that the high-tech nature of cryptocurrencies would continue to attract more sophisticated crooks. Take, for example, the recent “Squid Game” scam, in which investors claim that a new SQUID cryptocurrency token and an immersive online game tied to it were actually merely an elaborate scam. Investors state that the developers of the currency vanished once the price of the currency rose, following which they allegedly cashed out with more than $3 million.

Although the most brazen crypto scams make it into the news, such as the story of a Las Vegas poker player who stole $500,000 from another card shark, the majority of shakedowns are much more mundane and unremarkable. Consider scams that involve making threatening phone calls, making a desperate plea for money, or demanding that sums of cash be wire sent or else. There is no way to refute the fact that fraudulent activity involving cryptocurrencies is on the rise, regardless of the shape it may take. 

Between October 2020 and March 2021, the Federal Trade Commission (FTC) received 7,000 claims of crypto theft, with a combined worth of more than $80 million. These thefts were reported to have occurred. When compared to the same time period the previous year, this represents a one thousand percent rise in cash quantity and a twelvefold increase in the number of cases.

“Bitcoin-related scams track with other criminal vulnerabilities online until you try to recover your assets,” said cybersecurity expert Adam Levin. “These scams track with other criminal exploits online until you try to recover your assets.” “Cryptocurrency is designed to be difficult to track, and it is even more challenging to reclaim once it has been lost.” After it has been transferred, there are only a few very high-level exceptions to this rule. In recent years, the value of cryptocurrencies has skyrocketed, despite the fact that the volume of Bitcoin transactions has stayed relatively unchanged. In April of 2020, one Bitcoin was valued at approximately $9,000, in contrast to its current value of approximately $43,000.

one holding a 50 dollar bill and a bitcoin for another

Bitcoin scams to be on the lookout for

According to the Federal Trade Commission (FTC), based on scam reports made in the United States, over 7,000 people in the United States lost upwards of $80 million in crypto fraud between October 2020 and March 2021. 

This information is derived from scam reports filed in the United States. This represents a significant increase from the 570 bitcoin investment scams and $7.5 million in losses that were reported during the same months in the year prior.

Bitcoin fraud and imposters

On the encrypted messaging platform Telegram, the con artist allegedly pretended to be the victim’s business partner in the poker scheme that was described before. 

The fictitious partner wished to convert one million dollars worth of bitcoin, plus a charge of fifty thousand dollars, into fiat currency. The victim transmitted the Bitcoin, but they were unable to get the cash. When he tried to get in touch with his real associate through some other channel, his real associate had no idea what was going on.

There are times when the numbers participating in Bitcoin impostor schemes are far lower. For instance, one con artist who posed as a Coinbase reporter reached out to public relations firms and offered to provide favorable press for customers in exchange for a pitiful sum of $600. And then there are modern takes on more traditional scams involving Social Security. 

For instance, a criminal informed a woman living in Naples, Florida, that her Social Security information had been taken and was being used to open phony bank accounts. She was given the instruction to download an application, after which she had to move all of her money from her bank account into Bitcoin. Thankfully, a warning about possible fraud appeared on her phone before the crime could be committed.

cryptocurrency risk broken bitcoin

“Always wait a moment before clicking on links that have been sent to you via email or SMS, and don’t install apps on your mobile device unless you are one hundred percent certain that they are legitimate by checking the reviews on the platform where you found them,” said Levin. “This will help you avoid falling victim to a scam.” People are being instructed to put cash into Bitcoin ATM machines, according to a new Social Security fraud that the Federal Trade Commission (FTC) has warned the public about. The scammers are claiming to be from the Social Security Administration.

Fake bitcoin investment scams

The digital currency known as Bitcoin is itself an abstraction. It is a store of value that not only does not take any physical form but also lacks any kind of backing by the complete faith and credit of a sovereign government. 

These facets of cryptocurrency have a significant amount of interest for enthusiasts. Many people who have invested in Bitcoin believe that the less involvement the government has in money, the better. Others like engaging in financial dealings that are difficult for the government to track down and monitor closely.

Fortuitously, these are also huge benefits for con artists who build up false websites pretending to offer new investors the chance to make a quick buck. They take advantage of the fact that people are eager to participate in new businesses. This is what transpired with one individual who fell prey to a scam that originated in Australia in 2017. The individual, who has been identified by ABC Everyday as Jonathan, came across a post on Instagram that claimed the opportunity to make a return of fifty percent by mining for Bitcoin. He started out by sending the website $50, and not long after that. He received $30 in profit.

bitcoin invest

In addition, the Instagram account had thousands of followers and was loaded with endorsement films and videos of other people praising the service. It looked legitimate. After that, he boasted about his newly discovered chance to his family and friends. Together, Jonathan, his family, and his friends contributed approximately $20,000 to the cause. After that, both the account and the thief vanished into thin air. Not only did he lose his money, but several of his pals have cut off communication with him as a result.

These types of Ponzi schemes involving Bitcoin can end up costing victims a significant amount of money overall. According to the Federal Trade Commission (FTC), “many people have reported being attracted to websites that look like prospects for investing in or mining cryptocurrencies, but they are fraudulent.” “To appear respectable, websites utilize false testimonials and bitcoin lingo, but the promises of massive, guaranteed profits are nothing but lies.”

Bitcoin giveaway scam

Something very spectacular took place in the month of July in the year 2020. A number of well-known people and celebrities from different parts of the world concurrently promoted the same Bitcoin giveaway offer on their respective Twitter accounts. 

To my utter surprise, it appeared to be too good to be true. The former President of the United States, Barack Obama, said on his Twitter account, “I am giving back to my community owing to COVID-19!” “Any Bitcoin sent to the address below will have its value doubled and be paid back to you. If you wire me $1,000, I will send you $2,000 in return!

decentralized bitcoin fading

Several different social media accounts, including those belonging to Joe Biden, Kanye West, and Mike Bloomberg (a former mayor of New York City), all shared the same message. As you have undoubtedly figured by now, the giveaway offers were all a part of a historically unprecedented hack of Twitter. It was “a terrible day” for the social media firm, according to Jack Dorsey, who once held the position of chief executive officer at Twitter.

However, fake games of this nature are not something brand new. People are said to have sent more than $2 million in bitcoin to investment schemes appearing to be fronted by Tesla Inc. creator and crypto enthusiast Elon Musk over the course of a six-month period in late 2020 and early 2021, according to the estimates provided by the FTC.

If you’re a victim of a similar scam please get in touch with us to that we can help you get your money back!

Fake or anonymous identities

Jonathan Padilla, a former head of blockchain strategy at PayPal and the current CEO and co-founder of Snickerdoodle Labs, a blockchain data security company based in California that is looking into using blockchain to give consumers ownership of their cookies and browsing data, says that the absence of KYC protocols on blockchain is a major question mark for its widespread use. Jonathan Padilla is also a former head of blockchain strategy at PayPal.

Padilla says that there are no real controls in place on a decentralized network. Therefore it is impossible to determine who is a good actor and who is a bad actor. “In all honesty, the buyer should beware.” On a more positive side, blockchain technology has the potential to offer a new kind of transparency: On a blockchain, information cannot be changed or removed. Therefore the record of all transactions is available to the public. 

Fake ICOs

U.S. Justice Department detectives were able to follow the transactions on blockchain and collect the ransom money after Colonial Pipeline paid unnamed hackers 63.7 Bitcoin (valued at almost $2.3 million) back in June. The cryptocurrency was worth almost $2.3 million at the time.

Games and digital collectibles

On the blockchain, sophisticated coders now have the capacity to develop new games and entire imagined universes, just as we saw with the hoax involving the “Squid Game.” And to do it as rapidly as the next show on Netflix that becomes popular gains traction. 

Getting eager blockchain beginners to acquire a type of newly produced coin or token for a game is an easy approach to con people into falling victim to a fraud. If a sufficient number of people succeed in driving up the price as a result of supply and demand, the initial con artists will have the opportunity to “rug pull,” which is shorthand for selling all of their shares and disappearing.

On the blockchain, there is no such thing as fraud protection or FDIC insurance, in contrast to bank accounts for currency that is regulated by the federal government. If someone steals your money while it is stored on a blockchain, the only way to get it back is for the person who received it to reimburse you directly. That’s not very likely to happen in a decentralized trading platform. And despite the fact that well-known cryptocurrency exchanges have more safeguards against fraud than lesser-known exchanges do, there is still no assurance that investors will recover their lost cryptocurrency.

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    Key Takeaways! 

    Even the most experienced and enthusiastic bitcoin experts are aware that there are a lot of new risks that are still developing in the world of cryptocurrencies at the moment. 

    Some people have experienced scams firsthand, such as the blockchain investor and entrepreneur Ian Balina, who stated that he had lost $2.5 million after the information pertaining to his private wallet key was stolen as a result of someone hacking into his Evernote account. Balina said that the information was stolen because his private wallet key was compromised. 

    Even successful investors run the risk of incurring losses and falling victim to fraud when working with such a novel and volatile asset class, as the example of Balina demonstrates. Experts in the field of finance recommend that the majority of passive investors limit their cryptocurrency holdings to no more than 5 percent of their portfolios and that they never invest in cryptocurrency at the expense of putting money away for unexpected expenses or paying off high-interest debt.

    Lost money to online fraud? We will recover your funds !

    You are just 2 steps away from a free case review !
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      I can provide the documentation

      We only process cases of more than $5000

      We do understand that you’ve already been scammed online and that you’re naturally afraid of paying online. This is why we do offer a free case review, and won’t charge anything if your case isn’t qualified. Please do your part of the deal, and submit your case only if you truly intend to proceed with the recovery process.


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