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One of the primary purposes for creating this blog and specifically this post is to educate and warn people of the dozens of Bitcoin and cryptocurrency scams that operate across the globe. Corporations setup to look like legitimate Bitcoin companies are bilking billions of dollars from unsuspecting people and this post will show you some of the most common crypto schemes and red warning flags you should be looking out for before investing into any Bitcoin companies. 

Since 2014, I have personally seen close friends lose money by falling for outlandish promises of wealth with various Bitcoin schemes. In the end, most of these companies don’t exist anymore and the financial losses are anywhere from hundreds of dollars to tens of thousands of dollars. This is only people I have a direct relationship with. There are countless others that have lost millions.

It’s another tragic story of greedy con artists taking advantage of the public in a new industry that is is technical and so complex that they rely on getting rich off your ignorance or lack of education.  And just like traditional criminal fashion, the most inept scum of the earth became insanely wealthy in one of the largest financial heists of our time.

Common Crypto Scams That Swindled Billions of Dollars 1

One company alone, OneCoin, now known as OneLife is responsible for defrauding the public out of four billion dollars. This company has touched so many homes and robbed so many banks that it was recently launched as a BBC podcast, highlighting the story of the founder and how she manipulated so many people to think she was transforming the global financial system and creating the next digital currency, ultimately a replacement for all government issued currencies. 

If you lost money with this company or know of people that lost money with them, I promise episode 4 will put chills down your spine. Check out the BBC podcast here.  

I witnessed this debacle in real life and had conversations with top leaders who were trying to convince me to join.  I couldn’t tell at the time if they were just not educated and didn’t know they were selling me snake oil or if they helped concoct the snake oil and continued to perpetuate the lie. The calls usually ended with someone threatening me or calling me stupid for not “understanding” their technology.  I knew they were a lost cause and would continue to steal more and more money from people. 

Either way, I have people close to me that fell for the con even after I did my best to educate and warn them about the deception of the company, I have a strong desire to catch the criminal masterminds that duped so many people and tarnished the crypto industry, an industry that is already unconventional and trashed by corporate media on a daily basis. This just adds more challenges to getting crypto and Bitcoin to go mainstream.

Let’s discuss some common Bitcoin scams and things to pay attention to if you are invited to make money with Bitcoin.

Common Crypto Scams That Swindled Billions of Dollars 2

One of the main reasons people fell for the OneLife scam is because people didn’t know anything about Bitcoin or the Blockchain, (the infrastructure and technology that Bitcoin runs on.)  If you don’t know this and all you see is the price going up, you can be easily duped into thinking you have hit a jackpot. The problem is, the coin was never running on a blockchain. It was being operating in a database. The purpose for a blockchain is to ensure that data and transactions can’t be altered or changed. This means you can’t change price of Bitcoin or any real cryptocurrency.  OneLife coins operated in a database meaning they could manipulated. 

Common Crypto Scams That Swindled Billions of Dollars 3 Common Crypto Scams That Swindled Billions of Dollars 4

Another big problem is the OneCoin didn’t trade publicly. It was controlled in the OneLife in-house trading market so they dictated price. Nobody from outside of OneCoin could buy or trade onecoin so there were no external factors on the price. 

These are the two big red flags proving it’s not a cryptocurrency but if you don’t know this information then you can very easily fall for what looks to be the golden ticket to riches.

OneLife is the company that made the newspapers and stole the most money but there were other evil doers out there operating a similar business model. Even before OneLife you had Ufun. Ufun was actually my first intro to Bitcoin. This is where I discovered the rotten game and lost my first bit of money playing the markets. It didn’t take me more than 24 hours after buying to realize I bought a dud. 

My eyes were open now and I saw how the industry and the people we under assault. 

There was actually one other company that just came to mind that also had a fake coin. The notorious Bitcoooooonnneeeeeecccctttt.  Otherwise knows as Bitconnect. 

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So let’s recap what we just learned because this is the critical elements of understanding the legitimacy of a cryptocurrency. 

    1. You MUST have a coin operating on a blockchain. The blockchain is the permanent ledger that keeps track of EVERY transaction from day one and cannot be altered in anyway.  Once you understand the blockchain you will begin to see how amazing this technology is and positive impact it can have on almost every industry in our society. I digress.
    2. The coin must be trading on the open markets.  This prevents from internal market makers to manipulate the price. It’s also completely illegal in the U.S. That would be securities fraud and it’s exactly what OneCoin and Ufun were doing, hence them having no desire or showing any big push to enter U.S. markets. 

Let’s move on to the next line of Bitcoin scams. 

digital currency revolution

The first three companies created a coin and sold you on the idea they were going to become the most used digital currency in the world and if you got in early, you will get rich. There are a few other companies out there like this but these are the main two that made a lot of money off blatantly lying to you about a fake coin they created.

Once people caught on to understand Bitcoin and saw enormous increases in value it caught everyone’s attention. My Uber driver was telling me about Bitcoin. Even my ex girlfriend from 6th grade messaged me on Facebook asking about Bitcoin. I knew everyone was curious and wanted to get their hands on it. 

ICO Scams

The word was out that if you got into Bitcoin at a early stage then you were rich.  Everyone wanted in so bad they started buying coins that didn’t even exist yet based on it’s future potential.  The hype for this was so strong you had celebrities like Steven Seagal, DJ Khaled, and Floyd Mayweather promoting ICOs. 

Now let me clarify, a lot of projects were real and had intentions to create something significant. But most weren’t. Most were money games and people hoping they could buy a coin pre-market launch with the sole purpose of selling it a higher price once it goes public.  The reality is, most coins dropped in price at launch, leaving the majority of people to lose money. This dumpster fire died out quick when the SEC stepped in and vaguely said ICOs were securities and trading them would be considered securities fraud. You know, like OneCoin and Ufun. 

Bitcoin Multiplier Scam

bitcoin-doubler-scam

This is when you started seeing all types of companies popup promising to double or multiply your Bitcoin. You just send them your hard earned Bitcoin or cash, and they will double it for you. The people that got in early made some money but they kept investing it and in the end, none of these companies are around.

Newbie Bitcoin Trade Managers

The 3-month old Bitcoin trading experts then came out of the woods and offered courses and training to make millions.  People that argued with me about Bitcoin, or worse, joined OneLife, would launch Bitcoin trading courses. (Picture me slamming my head into my desk over and over again) It was like that on a daily basis. 

After years of being involved in crypto and even working with a crypto company that launched a legitimate cryptocurrency, it was daily messages pitching me on their trading programs. 

List of Bitcoin trading or investment schemes that failed

USI tech, which turned to Eyeline trading is now Wealth Boss? This company won’t go away.  They claim to mine and trade Bitcoin but a recent investigation claims that the mining rigs they purported to operate were actually owned by Genesis Mining. I know people that were involved in this but they never told me if they made money or not. 

Another company riding the success of Bitcoin and offering to multiply your portfolio has a highly sophisticated name and with a name like this, it’s gotta be a winner. It’s called.. get ready… the Bitcoin Doubler….  Yea, what more can I say? Other than run far away.

You don’t need to look to far to see this is just a copy of a copy of copy of multiple systems that operated before this. Also known as a HYIP (High Yield Investment Program)

It’s always the same story. They get a lot of people involved. Some people complain. The government get’s involved and spooks the creators and the money disappears. I’m not even a fortune teller and I have no crystal ball. I just know the outcome because this is not a new trick and you shouldn’t fall for it for no matter how cool of name it has. If it offers to double or multiply your Bitcoin, then run! 

More common Bitcoin scams the average person needs to watch out for…

Bitcoin Wallet Scams

bitcoin wallet scam

When you purchase Bitcoin you have a few options for securely storing your coins. You don’t want to leave your coins on an exchange if you aren’t trading frequently. Using a desktop wallet is okay if you are backing up your coins and have multiple backups on USB but the best way for storing your coins is with a crypto wallet using cold storage. 

There have been a few incidences where people went the extra mile to steal Bitcoin by pre-setting the pass phrases that are required to access your coins if you forget the login to your account. They don’t need the physical hardware wallet to steal the coins if they know the factory pass phrases that retrieve your coins. 

How to avoid this. Only buy your Bitcoin wallets from the site directly. There are only three Bitcoin wallets we recommend. Here are the official sites. Ledger, Trezor and Bitfi.  You purchasing through these links supports our site and allows us to continue creating content. We greatly appreciate it. 

Private Key Scams

Never ever give your private key away. For any reason. Even printing your private key can lead you vulnerable considering many printers have a hard drive and internal storage where this data could be stored. As unlikely as that is, you want to know every loop hole that someone can take who is after your money. 

Exchanges stealing your money

There have been numerous times that exchanges have straight up disappeared over night or they remain operating but never ever respond to support requests. They take your money but when it comes time to withdrawing, there always seems to be an issue. Mt Gox for example comes to mind. 

If you plan on trading Bitcoin, it’s best to use a mainstream exchange that has credible history. You can see our big list of Bitcoin brokers that offer trading platforms. 

Bitcoin Malware Ransom Scams

bitcoin ransom scam

There was a major issue a few years back when hackers were high jacking people’s computers and demanding they pay a certain amount in Bitcoin in order to retrieve control of their computer.  This usually happens when someone downloads malicious software with the sole intent to ransom you for Bitcoin. 

In conclusion, people want your Bitcoin and are constantly coming up with ways to take it out of your hands. I understand how easy it is to be persuaded in making money and doubling your Bitcoin and there are ways to make money with Bitcoin but you need to follow certain practices to ensure you are not putting yourself at risk. 

As more scams are discovered they will be added to this post so keep checking back to see what the criminal masterminds are up to. If you know of someone involved in any of these programs or want to warn people of the deception in this industry, feel free to share.

The bottom line, if you have more than a few hundred dollars in crypto, it’s best to securely store your coins in a hardware wallet that nobody can access. 

These are our most recommended Bitcoin and crypto wallets to best protect your digital assets.

Visit official sites here and never purchase from third party. 

Ledger, Trezor, Bitfi.

This sweeping new regulation is so intrusive… even the New York Times has said:

An unprecedented power grab hiding in plain sight:

The window to safeguard your money and financial privacy is closing. And it’s rapidly closing fast. I don’t enjoy it one bit but I have been left with little choices. I refuse to standby and let Washington’s control-freak sociopaths confiscate everything I’ve built up over the years.

For this reason, I’ve spent the past several years researching and determining simple, doable techniques that ordinary citizens may use to preserve their money and financial privacy. I highly recommend this Financial First Aid Kit if you are looking for a complete guide to preserving your wealth and financial privacy.

Patrick Moore
Patrick has been a part of the cryptocurrency community since 2014 and created CryptoWhat in 2015 to help new users learn more about cryptocurrencies. Despite not being a financial expert, his passion for cutting-edge technology drives him to share knowledge and information with as many people as possible about the potential of cryptocurrencies and how they will change the financial sector.