With all the buzz about bitcoin, more people are considering it as an investment. But with anything new and complex, con artists try to take advantage. BBB Scam Tracker has received many complaints from people who have lost 1,000’s.
How the Scam Works: You are looking to purchase bitcoin, so you search online. You find a legitimate-looking website that offers to mine the cryptocurrency for a fee. (Bitcoin is created by mining, using special software to solve complex math equations.) The website asks you to pay upfront, and bitcoin will be transferred into your account. However, after you make the payment, nothing happens.
Other versions of this scam target investors trying to convert bitcoin to their local currency. For example, one consumer used a service to exchange bitcoin for US dollars and transfer the money into a PayPal account. However, the transaction didn’t work. “My bitcoin account showed the transaction went through but the transaction timed out,” read the report.
How to Avoid Bitcoin Scams. Do your homework. Read about the technology underlying the system. You need to know how it works if you want to manage and invest effectively. Make sure sources are legitimate, and not just those trying to sell you something.
Shelley Polansky
Know where to store your bitcoins. It’s best not to store bitcoins in an exchange. Exchanges are can be vulnerable to hackers, whereas online wallets are considered a more secure place to store currency.
Be cautious with your investment. As with all investments, never invest money you can’t afford to lose. Investments come with risks and digital currency is still in a very early stage of development.
Review BBB online shopping tips. Many online purchase scams use similar tactics, and bitcoin is a growing payment method for scammers. See BBB.org/shoppingonline for more advice. Start with Trust® For more tips and information, visit bbb.org.
~ Shelley Polansky, VP/Marketing, Communications & Outreach