This blog was written by our Customer Service Manager, Joel Perfect.
7/20/18 Update: This article has been edited to include a list of potential scams where bitcoin is requested.
The world of Bitcoin, and cryptocurrencies, in general, can be intimidating and confusing. As Bitcoin becomes more mainstream, it is essential that we be aware of potential dangers that may be lurking out there.
Since the beginning of commerce and bartering, there have always been bad actors looking to make a quick and easy buck off of those who are unaware. Because Bitcoin has value and there is a demand for it, unfortunately, it is no exception, and there are many cryptocurrency-related scams to be aware of.
IF YOU ARE ASKED TO SEND BITCOIN FOR ANY OF THE FOLLOWING IT MAY BE A SCAM:
- IRS Payment
- Utility company payment
- Airbnb Reservation
- Job Posting
- Vehicle purchase via eBay or Craigslist
I’m here to share how to protect yourself and your Bitcoin from scammers who are trying to take advantage and to help you educate yourself on how to identify and avoid these scams. Below are my main tips for staying safe when it comes to cryptocurrency scams:
1. Know Exactly Who You Are Sending Cryptocurrency To
If you’re at all skeptical, don’t send the money until you are confident.
Due to Bitcoin having a certain level of anonymity, it is tough to find out who owns a specific wallet address. Add to this the fact that Bitcoin transactions by nature are irreversible, and you can begin to see why it is imperative to know who you’re dealing with.
Most scams you will encounter involve sending Bitcoin or cryptocurrency to someone you don’t know, often in exchange for goods or services. If you are not dealing with someone that you know to be trustworthy, it is essential to be very skeptical and err on the side of caution. A good rule of thumb is to not send Bitcoin to anyone you are not 100% sure is on the up-and-up.
As an example, one scam that we see often is for automobiles or vacation rentals. You may find these ads on Craigslist or other similar sites offering up deals that seem almost too good to be true. When you think something sounds too good to be true, you’re probably right. Once you initiate contact with the vendor, you will be asked to send cryptocurrency to pay for the item, and after you do, you will never hear from the ‘seller’ again. This is why the most important piece of advice I can give to protect yourself is to know who you’re dealing with.
2. Don’t Take Action Until You Verify Who is Calling and Requesting Cryptocurrency.
Generally, you shouldn’t be receiving calls with legal threats and cryptocurrency payment requests.
Another threat to be aware of is ‘IRS’ scams. These ‘IRS’ scams are typically phone calls you may receive threatening you with legal action due to unpaid back taxes. The caller on the other end will threaten to have you arrested and thrown in jail unless you pay them the amount of money they say you owe.
These scammers have used all sorts of payment methods, including gift cards, but have now started asking for cryptocurrencies. If anyone calls you claiming to be from the IRS and threatening you with legal action, these are without a doubt scams. Do not send any money to these individuals. The IRS will not contact you by phone with threats of legal action.
If you’re ever unsure about a transaction, our Customer Success team is available seven days a week from 9am-7pm PST to answer any questions you may have, and we will help you make sure that you’re safe with your coins. Don’t hesitate to reach out to us!