From poorly written forum advertisements posted on the deep dark web, to seemingly stable multi-million dollar exchanges, scams involving bitcoin are abundant and plentiful. 

It's microscopic when compared to credit card fraud, which is in the billions annually, and everything is trounced by cash. Money-laundering alone is a 2.2 trillion dollar annual industry. However, scams do involve bitcoin from time to time just like any other payment method, currency, or commodity, and this is the topic of our latest Top 10.

Note, all of the following assume "bitcoin" is also present.

The Top 10 Most Obvious "Tells" That It Might Just Be A Bitcoin Scam. 

 10  IF ITS AN EMAIL FROM BITPAY'S CEO... It might just be a Bitcoin scam

Just ask CFO Bryan Krohn, he received an alleged email from Bitpay's CEO ordering him to send 1.8 million bucks somewhere, which he did, and came to find out it was a scammer that sent that email and made off with the bitcoin.

Always verify the source if it's more than $1.92, especially if it's BitPay's CEO since we now know there is at least one impersonator on earth.

 9  IF YOUR RICHES BEGIN WITH ONLY 0.001...  It might just be a Bitcoin scam

This is what we call a Nonzi. It looks, feels and smells like a Ponzi, but it's not. 

This scheme isn't going to pay anyone back anything. It's not meant for that, it's meant for enough people to "give it a try" at the tune of next to nothing and then they take the money and walk. 

I say walk because they don't need to run. Nobody will be chasing at them with a loss of only 0.001 (roughly 22 cents). 

 8  IF CLOUD MINING IS INVOLVED ...  It might just be a Bitcoin scam

This is not to say that cloud mining is all bad, there are a few companies out there that offer this and do not completely suck.

It's just rare to find a reputable company offering any kind of realistic returns with cloud mining. If you do, it's most likely from vigorous marketing and financial backing.

Most cloud mining schemes that people just "stumble upon" are Ponzi schemes.

 7  IF SOMEONE CALLS YOU "BRO" ...  It might just be a Bitcoin scam

I'm not here to explain why, although I would if I had the answer, but scammers like to call people "bro". In fact most scammers that I have dealt with on a communication level called me "bro", "friend", or some sort of "bro" variation. (this is more related to P2P transactions)

Well I'm an asshole, so I know there's no chance of anyone calling me any of these things unless they are up to something shady.

But why are they calling anyone anything other than Sir, Ma'am? Defintely not synonymous with a reputable organization or individual and an easy tell.

If they had half a brain they would at least scam with some manners. I can certainly be spared the whole "Sir" thing, but my Mother would likely slap the scam right out of them if they called her "bro".

Now that I think about it, I'd actually pay to see that.

 6   IF AN "INSIDE JOB" IS MENTIONED... It might just be a Bitcoin scam

The infamous "inside job" has been trending. When an exchange gets hacked or does something stupid, a quickly mentioned possibility of an "inside job" suspected always seems to follow shortly thereafter.

Of course it's an inside job. Generally when massive amounts of coin go missing and seemingly vanish without a trace, you can pretty much bet that someone on the inside had something do to with it in some way.

Server security is not easily bypassed at these establishments without causing a scene and leaving a trail, so the only way someone is pulling this off is from the inside and it's tight for good reason. Some of these operations likely have an exit plan mapped out and want to make sure they, and only they, can steal the coins.

 5  IF YOU SEE THE NAME JOSH GARZA  ...  It might just be a Bitcoin scam

Josh Garza, the man behind the GAW Miners Ponzi scheme, should not be allowed to even hold a position as a janitor at any company that has anything to do with any kind of money or value that belongs to anyone else on earth. 

GAW wasn't even a good Ponzi scheme. Everyone knew it from the beginning and it was exposed by calculators, math teachers, bean counters, 5th grade students, dishwashers, lawnmower men, and then finally, the Feds caught on.

The sad thing is that GAW was once a reputable company and had it grown in a slow and steady manner, it may well have ended up one of the top BitCo's.

Instead, it went full Ponzi.

 4  IF TOR WAS REQUIRED TO FIND IT...  It might just be a Bitcoin scam

Let's face it ... anything you find on the deep dark web is immediately suspect. It's not just innocently hidden there on accident.

 3  IF IT PROMISES TO DOUBLE YOUR MONEY...  It might just be a Bitcoin scam

See the aforementioned Ponzi scheme's and avoid anything at all promising to double your money.

Bitcoin multipliers don't work, they are scams. 

If you could double your money everyday consistently by just handing these chaps a bitcoin, we'd all just send one and take the rest of our life off.

We would watch the entire planet crumble as every infrastructure would break down into nothing since no one would be doing anything except the one company who can do this.

That company of course, did mankind a favor and instead of keeping their little gem a secret, were willing to let world know of their masterful wizardry so that everyone could retire tomorrow leaving them to be the last idiots standing on earth who still have to go to work in the morning.
That's never going to happen, and this is simply not possible.

Here's a tip, when faced with this one you can always give this a try: Death By Tweet

 2  IF MARK KARPELES IS INVOLVED ... AT ALL ...  It might just be a Bitcoin scam

If Mark Karpeles (Mt. Gox) has touched, might touch, or may, in the future, think about touching anything you might consider trusting your money with.



Just a few tips.Run fast and run far away. Forget you ever came near it because Mark Karpeles is responsible for the largest bitcoin related implosions ever, Mt. Gox. 

Hopefully they will lock this guy up forever just to make sure they can keep him away from other peoples money.

I would enjoy the irony of the $40,000 bed that was purchased with stolen bitcoins given the new accommodations he would have to get accustomed to.

 1  IF IT WALKS LIKE A DUCK ...  It might just be a Bitcoin scam

In other words, if it sounds to good to be true, it's not true. Common sense is always your best friend.

BS is BS so don't be a sucker. Assume everything is a scam until you are proven otherwise.

Just to name a few points, an actual trustworthy operation:
  • is not going to ask you for any money until KYC is accomplished (ID and proof of said ID)
  • is going to have a physical address
  • is going to have a phone number
  • Usually is not going to be stumbled upon or found on the dark web
  • won't have silly testimonials
  • will be registered with FinCEN (USA), AUSTRAC (Australia) or comparable agency
  • will be happy to send you more information by mail or email
  • will speak to you personally on the telephone, and most importantly;
  • won't call you "bro"

Fraud Comparison Breakdown

Before we go, let's circle back to what I mentioned prior to the top 10 and just to run through some quick number estimates.

As mentioned above, bitcoin fraud is nothing in comparison to the crap credit card and cash money criminals pull off. Last year (2014), credit card fraud accounted for about about 5.5 Billion. That's an enormous number, $5,500,000,000 and to put it into perspective look at the pie chart below.

This is just the difference between stolen/fraudulent bitcoin and credit card fraud. In 2014, Bitcoin loss due to fraud and other criminal activity accounted for approximately $400,000,000 (400 Million USD), which is staggering, but compared to the 5.5 billion in credit card fraud, it's just a small slice of the pie.

Now lets take a look at how they both compare to cash (specifically money laundering), we had to show this in two charts and with some lower numbers since Bitcoin was literally undetectable when cash fraud was added to the equation, so ignore the 96.9% Cash percentage, it is inaccurate.

What is really sad about this graph, and why you can't use the 96.9%, is that the credit card and bitcoin numbers are annual, but the cash (money laundering) is for one month.

It's the only way we could register it on the chart visibly. Bitcoin came in at less than 1/4 of a percent (0.002%) of the total fraud worldwide in these categories.

You never really hear about these facts, but there they are. We felt it useful to point them out.

This certainly doesn't make anything regarding Bitcoin any safer, and unlike a credit card charge, bitcoin cannot be reversed, so keep your guard up.

Stay safe out there!

The Top 10 by dinbits
Header Image Source: dinbits news
Side Image Source:
Published 9/21/2015 10:30 PST
Graphs created using Google Charts

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