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Beware of These Top 5 Bitcoin Scams
The value of bitcoins goes up, and then it comes back down. The press is all over the story. Pundits and market watchers all have their opinion and voice it loudly across the airwaves and the Internet.
Bitcoin has taken us all on quite a rollercoaster ride. Only time will tell whether this cryptocurrency, which has been controversial since its introduction in 2008, will continue booming or if the bubble will burst and prompt more people to short-sell Bitcoin.
One thing is certain: Bitcoin’s meteoric rise has attracted a lot of attention. People may not understand the technology or philosophy behind Bitcoin, but they do see stories of early adopters and savvy investors who turned a few thousand bucks into millions when Bitcoin’s value increased.
And they want to be one of them.
Unfortunately, that puts them in a position—along with veteran investors—to be victims of opportunistic con artists and hackers who perpetrate Bitcoin scams. One of the benefits of cryptocurrency is that it’s unregulated by the government and very private. But that also makes it ripe for fraud.
Let’s check out the top five Bitcoin scams you need to look out for:
Bitcoin Scam 1: Fake Bitcoin Exchanges
In 2020, South Korean financial authorities and the local Bitcoin community exposed one of the most insidious Bitcoin scams: a fake exchange called BitKRX. It presented itself as part of the largest trading platform in the country and took people’s money. To avoid this, you should stick with popular, well-known Bitcoin exchanges and Bitcoin forums so you get news of fakes quickly.
Bitcoin Scam 2: Ponzi Schemes
Bernie Madoff is perhaps the most well-known Ponzi schemer. He did it with mainstream investments. But the principle of a pyramid scheme, in which you take money from new investors to pay previous investors, can be applied to Bitcoin scams. MiningMax, one such scheme, brought in $200 million before 14 fraudsters were arrested. As you can imagine, the investors never got any returns on their Bitcoin investments.
Bitcoin Scam 3: Fake Cryptocurrencies
A common scam is to present a new cryptocurrency as an alternative to Bitcoin. The idea is that it’s too late to cash in on Bitcoin and that you need to invest in one of these up-and-coming cryptocurrencies. My Big Coin was shut down for this reason. The fraudsters behind My Big Coin took $6 million from customers to invest in the fake cryptocurrency and then redirected the funds into their personal bank accounts.
Bitcoin Scam 4: Old School Scams
If somebody emailed or called and said they were from the IRS and that you owed back taxes that had to be paid immediately, would you send them money? Many people do. Instead of having the victim wire money via Western Union or transfer funds to a bank account, con artists are contacting victims and demanding that victims transfer bitcoins. The best way to avoid this scam is to be skeptical of phone calls or emails that say they’re from a government agency. Legitimate authorities wouldn’t contact you that way, and they won’t ask for bitcoins.
Bitcoin Scam 5: Malware
Malware has long been a way for hackers to get passwords needed to access computer networks or steal credit card and bank account numbers. Now they’re using it to conduct another one of the most common Bitcoin scams. If your Bitcoin wallet is connected to the Internet, they can use malware to get access and drain your funds if you’re not protecting yourself from malware.
You can download malware by clicking links in your email. You can also download it from websites and social media. There might be a post, for example, where someone claims a certain program allows you to mine bitcoins for free. Download it, and you get malware.
When in Doubt, Verify
If you’re not sure of a website or email’s legitimacy, contact the company involved directly. If you can’t find the company’s contact information easily on social media or on its website, that’s a red flag.
Don’t Fall Victim to Bitcoin Scams
Bitcoin is a volatile enough investment as it is. Don’t increase your chances of losing money by falling prey to these Bitcoin scams. Stay alert for potential fraudsters and trust your instincts. If something seems too good to be true, it probably is.
Axbit is a mining service that is promising the investor that they stated the change of cashing out daily bitcoins by investing in their mining power and software.
However, this is now a common line used by scammers in the quest to steal the cryptocurrency of investors who did not conduct proper due diligence before buying mining plans.
The Challenge of Ignorance
In reality, scammers are taking advantage of the ignorance of people concerning Bitcoin and other cryptocurrencies to set up sites meant to steal from people. This is why you must read this Axbit post to learn some signs to watch out for if you’re thinking of investing in cryptocurrencies online.
Bitcoin mining is the process of generating bitcoins, carried out using specialized equipments that sometimes demand a lot of electrical energy to work successfully. Nevertheless, having these do not guarantee that you would get even a small fraction of bitcoin.
What is AXBIT?
Axbit claims to be the fastest bitcoin mining company that provides opportunity for users of the service to earn a lot of bitcoins without hardware and software. They claim that you may not even need to put down money to make profit using this platform.
They also claim that they’re getting 750 new users daily and have paid out 4700 bitcoins to more than 600,000 investors who have invested in the site.
How Feasible Are These Claims?
We ran a background check on this site and its claims and discovered that the domain Axbit.com was registered on April 30, 2020 which means that this is a site that is less than two weeks old. It is impossible for a site like this to have 100 investors talk less 600,000.
How could it have generated any money to pay 4700 bitcoins? It even claims that it has 750 new users every day. Ordinarily, Axbit should have been ignored but the reason we run reviews on sites that are obviously owned by crooks is that there are people searching for such information to help them make decisions.
Scammers would do anything to convince investors and steal their money. This is the primary reason sites like Axbit.net are set up. The cybercriminals behind it hope that some big investor or many small investors would be fooled to buy the dubious mining plans.
One of the strategies employed by shady sites is fake reviews. Axbit.net is not lacking it hoping that you’d be fooled thinking there’s something in it for you.
One Jerry Waal has been using the Axbit service since 2020. How possible could that be since the mother company was set up in February 2020 while Axbit was launched less than 2 weeks ago?
Interestingly, we found out that this scam site is related to another scam mining site Bitza.io. It seems that the scammers behind Bitza simply changed domains to fool more people.
A visit to the Bitza site confirms this:
Bitza needed to change from name due too [sic] copyright issues. We have changed our name to Axbit and our new domain name is: https://www.axbit.net
For our users nothing much changed. The only change is your referral link. You can get your new referral link in your member dashboard!
This is not surprising. Scammers move from site to site as they are discovered. It is better perhaps to start a new one after defrauding many people so that the public outcry on the new site seems minimal.
In any case, what is obvious is that Axbit is not different from Bitza since the same entity is behind them. The only difference is that one was set up in February and the other in April with the same purpose of stealing from investors.
“Are You Convinced”?
The person behind Axbit asks to know if you’re convinced and ready to invest in the site. The question that we, at Cryptoinfowatch ask people who are defrauded by scam sites is what actually convinced them that they could make money from a site whose owner is unknown.
In reality, if that’s how easy it is to make money, there’ll be no poor people. No business has the capacity to routinely make huge profit and share with random people.
When you factor in the fact that there is no form of regulation or legitimacy around a site like Axbit.net, you’ll understand why it is a wonder that there are people who are actually convinced to send money to the wallets of the fraudsters.
Mining is not a sure path to wealth. Indeed, there is no sure path to wealth so when anyone claims there’s easy money to be made, do not believe them. Especially if they cannot prove that there is something worthwhile they’re doing to earn it.
Axbit is a confirmed scam and should be avoided. If you’re interested in a genuine investment that could change your financial future, check our recommendation.
What to Know About Cryptocurrency
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Cryptocurrency is digital money. That means there’s no physical coin or bill — it’s all online. You can transfer cryptocurrency to someone online without a go-between, like a bank. Bitcoin and Ether are well-known cryptocurrencies, but new cryptocurrencies continue to be created.
People might use cryptocurrencies for quick payments and to avoid transaction fees. Some might get cryptocurrencies as an investment, hoping the value goes up. You can buy cryptocurrency with a credit card or, in some cases, get it through a process called “mining.” Cryptocurrency is stored in a digital wallet, either online, on your computer, or on other hardware.
Before you buy cryptocurrency, know that it does not have the same protections as when you are using U.S. dollars. Also know that scammers are asking people to pay with cryptocurrency because they know that such payments are typically not reversible.
Cryptocurrencies vs. U.S. Dollars
The fact that cryptocurrencies are digital is not the only important difference between cryptocurrencies and traditional currencies like U.S. dollars.
Cryptocurrencies aren’t backed by a government.
Cryptocurrencies are not insured by the government like U.S. bank deposits are. This means that cryptocurrency stored online does not have the same protections as money in a bank account. If you store your cryptocurrency in a digital wallet provided by a company, and the company goes out of business or is hacked, the government may not be able to step and help get your money back as it would with money stored in banks or credit unions.
A cryptocurrency’s value changes constantly.
A cryptocurrency’s value can change by the hour. An investment that may be worth thousands of U.S. dollars today might be worth only hundreds tomorrow. If the value goes down, there’s no guarantee that it will go up again.
Investing in Cryptocurrency
As with any investment, before you invest in cryptocurrency, know the risks and how to spot a scam. Here are some things to watch out for as you consider your options.
No one can guarantee you’ll make money .
Anyone who promises you a guaranteed return or profit is likely a scammer. Just because an investment is well known or has celebrity endorsements does not mean it is good or safe. That holds true for cryptocurrency, just as it does for more traditional investments. Don’t invest money you can’t afford to lose.
Not all cryptocurrencies — or companies promoting cryptocurrency — are the same.
Look into the claims that companies promoting cryptocurrency are making. Search online for the name of the company, the cryptocurrency name, plus words like “review,” “scam,” or “complaint.”
Paying with Cryptocurrency
If you are thinking about using cryptocurrency to make a payment, know the important differences between paying with cryptocurrency and paying by traditional methods.
You don’t have the same legal protections when you pay with cryptocurrency .
C redit cards and debit cards have legal protections if something goes wrong. For example, if you need to dispute a purchase, your credit card company has a process to help you get your money back. Cryptocurrency payments typically are not reversible. Once you pay with cryptocurrency, you only can get your money back if the seller sends it back.
Before you buy something with cryptocurrency, know a seller’s reputation, where the seller is located, and how to contact someone if there is a problem.
Refunds might not be in cryptocurrency .
If refunds are offered, find out whether they will be in cryptocurrency, U.S. dollars, or something else. And how much will your refund be? The value of a cryptocurrency changes constantly. Before you buy something with cryptocurrency, learn how the seller calculates refunds.
Some information will likely be public .
Although cryptocurrency transactions are anonymous, the transactions may be posted to a public ledger, like Bitcoin’s blockchain. A blockchain is a public list of records that shows when someone transacts with cryptocurrency. Depending on the cryptocurrency, the information added to the blockchain can include information like the transaction amount. The information also can include the sender’s and recipient’s wallet addresses — a long string of numbers and letters linked to a digital wallet that stores cryptocurrency. Both the transaction amount and wallet addresses could be used to identify who the actual people using it are.
As more people get interested in cryptocurrency, scammers are finding more ways to use it. For example, scammers might offer investment and business “opportunities,” promising to double your investment or give you financial freedom.
Watch out for anyone who:
- guarantees that you’ll make money
- promises big payouts that will double your money in a short time
- promises free money in dollars or cryptocurrency
- makes claims about their company that are not clear
Cryptojacking is when scammers use your computer or smartphone’s processing power to “mine” cryptocurrency for their own benefit, and without your permission. Scammers can put malicious code onto your device simply by your visiting a website. Then they can help themselves to your device’s processor without you knowing.
If you notice that your device is slower than usual, burns through battery power quickly, or crashes, your device might have been cryptojacked. Here is what to do about it:
Close sites or apps that slow your device or drain your battery.
Use antivirus software, set software and apps to update automatically, and never install software or apps you do not trust.
Do not click links without knowing where they lead, and be careful about visiting unfamiliar websites.
Report fraud and other suspicious activity involving cryptocurrency, or other digital assets to:
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