How to spot a crypto scam

The nature of blockchain and cryptocurrencies is decentralised, permissionless, and borderless. This means that anyone can accept payments from anywhere in the world. Additionally, there is no need to incorporate in a regulated jurisdiction or set up bank accounts or merchant facilities. As the Bitcoin price rises and gets mainstream coverage, it has given rise to many scams targeting retail investors. As with any financial product, it pays to take the time to understand your investment and protect yourself from unscrupulous operators.

This blog will point out some examples of common crypto scams to watch out for and how you can keep yourself safe.

Before transferring cryptocurrency or any other assets, it’s essential to do thorough research to protect yourself and your funds.

This process, known as due diligence, involves carefully evaluating and understanding the risks associated with any individual, investment venture, or organisation you’re considering interacting with.

The Australian Government, through both the ACCC’s ScamWatch and The Australian Cyber Security Centre (ACSC), offers vital guidelines to help Australians stay safe online. For anyone involved in the crypto space, it’s a good idea to stay updated with their recommendations and warnings. Always be cautious, and remember: If something seems too good to be true, it probably is.

Common traits of scammers:

Asking for payment in Bitcoin or other types of cryptocurrency rather than your local currency.
Requesting a small amount of money initially, before asking for a larger amount.
Calling regularly or pressuring you to invest more money.
Instilling fear of missing out (FOMO) to pressure you into investing.
Promising guaranteed payouts or high investment returns.
Websites or social media accounts that contain incorrect spelling or grammatical errors.
Contacting you first through Direct Message offering to “help” you with an issue.
Making big claims without providing a detailed explanation or supporting information.

Common Scam Examples

Romance Scams

Online dating platforms and apps can sometimes be exploited by romance scammers. These individuals prey on those seeking romantic connections. When using your Bitcoin.com.au account, ensure you remain vigilant and consider the following:

Were you prompted or guided to create an Bitcoin.com.au account?
Have you installed remote access tools like Anydesk or Team Viewer on your devices?
Is the person you’re communicating with located in Australia or abroad?
Are you being asked for urgent Bitcoin (BTC) transfers instead of AUD?
Has there been any request to make minor deposits into your Australian bank account for the purpose of buying cryptocurrency?

For more insights on dating and romance scams, refer to the provided resources below.

Scamwatch – Dating & Romance Scams

Investment Scams

Beware of potential investment scams often initiated by unexpected messages or calls, especially from international numbers. When transferring funds from your Bitcoin.com.au account, be cautious if you encounter:

Offers of high profits for a small starting investment.
Demands to pay taxes outside of Australia.
Invitations to invest with companies outside Australia or those lacking an Australian Financial Services Licence.
Persistent or aggressive calls from international numbers or pushy account managers.
Allowing small increments to be withdrawn to incentivise larger investments.

For more insights on Investment scams, refer to the provided resources below.

MoneySmart – Investment Scams

Remote Access Scams

Remote access scams often start with unexpected messages or calls, seemingly from credible companies like your telecom or internet provider. When dealing with your Bitcoin.com.au account, be cautious if:

Someone offers to set up an Bitcoin.com.au account for you.
You’re asked to download remote access tools.
There are requests for personal documents, like your licence or passport that do not come from a registered Australian service provider.
You’re given scripted instructions to follow.

For more insights on Remote Access Scams, refer to the provided resources below.

ACSC – Remote Access Scams

Recovery or Reclaim Scams

Recovery scams often occur after falling victim to an investment scam. Be cautious if:

You’re promised recovery of funds from an overseas company.
There’s a demand for upfront recovery fees.
You receive a generic Alternative Dispute Resolution (ADR) letter.
- An ADR letter is a document used to initiate a process for resolving disputes outside of formal court proceedings. It typically outlines the methods for negotiation or mediation to address a specific issue. However, in the context of recovery scams, such letters may be generic and used to falsely convey legitimacy or solicit upfront fees.
The recovery company isn’t registered or based in Australia.

Instagram, Whatsapp, and Telegram Scams

You might get unsolicited messages from fake wealth managers, financial advisors, or crypto promoters promising big returns for small crypto investments. They use tactics to win your trust, often being pushy.

Remember:

Bitcoin.com.au will never ask you to send funds to external wallets or click on dubious links.

Be Cautious of:

Profiles claiming to be FX/Forex traders, crypto miners, mentors, or account managers.
Offers to trade or coach on your behalf.
Promises of high returns for low investments.
“Influencers” showing off luxury lifestyles, using possibly stolen images.
Fake success stories or doctored financial screenshots on their profiles.
Accounts with many followers but little interaction – likely fake followers or bots.

Don’t trust claims that Bitcoin.com.au is a partner

Bitcoin.com.au is a venue for the trading of Bitcoin, Ethereum, Bitcoin Cash, and other cryptocurrencies. We are not involved in any Digital Currency investment schemes. We have been working closely with regulatory bodies since our founding in 2013 in Australia and 2020 in Singapore. Any partners or companies we work with are clearly displayed on our website Bitcoin.com.au homepage.