There’s a new breed of fraudsters out there, and it looks like they’ve made the hugely popular ‘Bitcoin’ their latest target.

Bitcoin fraud, like any other investment fraud, comes in different shapes and sizes. Here are a few common types of scams that you must be aware of:

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The ‘Take Your Cash And Go Missing’ Scam

It seems like plain common sense to be wary of seemingly authentic Bitcoin traders, who demand cash up front to buy Bitcoins on your behalf. But many cases have emerged that prove such scams are not uncommon.

Such a scam was recently uncovered in the UAE, wherein the fraudster posed as an online Bitcoin trader and lured a gullible investor to meet his partner and hand over a huge amount of cash to him for the purpose of buying Bitcoins. Once the cash was in his hands he ran off with it, only to be caught by the police before he had the chance to transfer the money to his partner, based offshore.

The ‘Buy Bitcoin Online At A Huge Discount!’ Clickbait Scam

Be very cautious of catchy ads that promise a great Bitcoin deal. These are often marketing tactics of scammers who use enticing ads as clickbait. Clicking on the link in such ads would take you to the website of a fake Bitcoin exchange and eventually to a payment link. Once you pay, there’s no hearing back from the so-called exchange – No payment confirmation and no Bitcoins credited to you.

Phishing scams via email also operate in a similar fashion. No matter how authentic the source looks, don’t click on any hyperlinks provided in it!
[Related: Investing In Bitcoin? Be Aware Of These Risks…]

The ‘Guaranteed High Returns’ Ponzi scam

This is another variant of Ponzi or pyramid scams, that we’ve seen emerge across the investment scene. These are usually online scams that promise a guaranteed high-yield return on your Bitcoin investment. Fraudsters make bizarre claims calling investors to double their Bitcoins in a week or earn a high percentage return.

A few initial investors may see some returns and spread the word around, roping new investors in. Once the pool of investment gets big enough, the fraudsters will shut shop, and go absconding with the investors’ money.

So, if you’re a potential investor interested in investing in Bitcoins, how do you do so in a safe and secure way? Here are a few tips to traverse the Bitcoin market cautiously:

  • If you want to buy Bitcoins, sign up for a trusted Bitcoin wallet service. Coinbase,, and Xapo are some popular choices.
  • Avoid clicking on ads offering Bitcoin deals that sound too good to be true.
  • Don’t open any attachment or click on a hyperlink in emails presenting a ‘lucrative’ Bitcoin deal.
  • Check the legitimacy of online trading websites that advertise Bitcoin exchange services.
  • The ‘s’ in the website address starting with ‘https://’ indicates that it is secure. Watch out for it.
  • Don’t agree to meet a trader in person for a cash handover for buying Bitcoins.