Top 4 Crypto Mining Scams

Top 4 Crypto Mining Scams To Avoid This Year

Since the time cryptocurrency has started reaching the general public's hands, there have been lots of scams happening around it. However, in recent times, cryptocurrency has become more popular. As a result, cryptocurrency scams are on the rise. In this article, we'll show you what to do if you have lost money to crypto, trustworthy ways of recognizing legit platforms, as well as the best education you can get when it comes to investing. Let's begin.

As the cryptocurrency trend is also rising, many people learn about it by the day and actively investing. Unfortunately, this has allowed scammers to defraud people. From Bitcoin scams to Ethereum, Doge, and other brands, the online world is now full of unknown territories.

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Below are the top crypto mining scams you should know and avoid.

1. Android Crypto Mining Apps

Mining crypto right from your Android device seems like a great idea. After all, who wouldn't want to make money as they use their smartphone?
This indeed looks like a great investment opportunity as you don't need to purchase expensive hardware to mine Bitcoin or any other currency.
But according to research conducted by Lookout, Inc, most crypto mining apps are happening through Android Apps.

Among such apps, BitScam and CloudScam are two of the known app types. These apps were designed to target crypto interested users. However, the apps have now been removed from Google Play Store.

But according to the news, there are more than 170 crypto mining scams are available. Also, these have been estimated to have scammed more than 93,000 users.

 

Talking about these apps, The BitScam and CliudScam apps advertise themselves as cloud cryptocurrency mining platforms, and in return, they charge a fee. However, according to the Lookout researchers, the app owners pocketed the money without delivering the promised services.
Also, it is said that these apps scammed around $350,000 from their victims. These popular apps include Top Coins, Mr. Bitcoin, Star BTC, BitHash, Bito Holic, and more.

These apps made the users believe that they were paying for crypto mining services. But none of such services were provided to the users.
Also, the app stayed undercover and functioned smoothly under the eyes of the Play Store since the apps did not do anything malicious.

2. ICO Scams

ICO – or Initial Coin Offerings – is one of the popular ways to raise funds for a project. ICOs are said to believe that they can replace the established venture capital-driven funding for startups.

Also, ICO gives the initial adopters a chance to grow their money. As a result, in terms of investments, ICOs are pretty great. But there is a rise in ICO scams. Often scammers hype a project using PR activities, such as telegram channels, messages, advertisements, and so on. Their main goal is to attract as many investors as possible and offer them a certain amount of coins promising higher rewards. It is the case of the Pig Butchering Text Scam, for instance.

However, scammers soon enough exit from the project without delivering promising rewards to the investors. Also, the value of the coin starts decreasing. As a result, you end up losing all your investments. Also, most of the ICOs get launched at fraudulent exchanges. Luckily, in today's time, ICO scams are rare.

But still, if you are new to the world of cryptocurrency, getting fooled by such ICO scams is pretty common. To keep yourself safe, remember two things: do your due diligence on the ICO project you want to invest in and use a reputable crypto exchange like Binance and Coinbase for Global operations or Swyftx exchange if based in the Australian region.

3. OneCoin Scam

OneCoin was one of the surprisingly largest scams in the world of cryptocurrency. The scam was conducted by Crypto Queen Ruja Ignatova – A Bulgarian citizen.

The scam ran from 2014 to 2016, and it used to operate as a multi-level marketing or MLM scheme and touting its coins. The platform's users could mine the coin easily, and she called the coin a Bitcoin killer. Soon people from every part of the globe started to invest their savings into OneCoin. According to a report, British people spend almost €30m on OneCoin in the first six months of 2016, €2m of it in a single week.

OneCoin was launched, claiming that 120 Billion coins could be mined and used for making payments. But, it did not have any blockchain model or payment system. However, the scam came out in 2016 when many countries began to investigate the company. Some countries were calling in a pyramid scheme. Also, after many years of investigations, Founder Ruja disappeared in 2017 when a warrant was filed for her arrest.

Overall, OneCoin as a cryptocurrency never actively traded. Or the coins could be used for purchasing anything.

4. BitConnect

BitConnect was an open-source cryptocurrency and a native token. It was launched back in February 2016. However, soon it really turned out to be a Ponzi scheme.

After launching the project, they aimed to function how participants in the BitConnect scheme receive payouts. It guaranteed the investors up to 40 percent total return per month. Also, it followed a four-tier investment system based on the sum of initial deposits. As a result, the more cash you invest in, the bigger and fasters you would be able to make.

Also, BitConnect promised a 1% return of investment or ROI daily. Also, the company said to develop a trading bot and volatility software that would make one's bitcoin investment into a fortune. Based on this, if you have invested $1000 into your BitConnect investment account, it would have turned $50 million within three years. But, as in every scheme, it was too good to be true.

However, this also brought a lot of criticism from the crypto community. But the company maintained the momentum and went ahead with it. But soon the BitConnect's organizers exit the scheme leaving the investors with BCC, which has a virtual value of Zero.

Caution Is Mandatory

So those were some of the known crypto investment scams that the crypto community has seen. Unfortunately, now and then, scams like these appear. Hence, as an investor in this niche, you need to be very careful with where you are putting your money. Also, make sure to research well before falling into such schemes.

If you feel a crypto website might be suspicious, feel free to verify it using our unique Scam Detector website validator below:

Trustworthy Help Before Investing

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How To Report a Crypto Mining Scam

Let your family and friends know about this article on your social media. You can also officially report the eventual crypto mining scams to the Federal Trade Commission using this link below:

Report To The FTC Here

How To Protect Yourself More

If you want to be the first to find out the most notorious scams every week, feel free to subscribe to the Scam Detector newsletter here. You'll receive periodic emails – we promise not to spam.

Meanwhile, educate yourself with some other crypto fraud-related articles under this paragraph, so that you know how to stay safe online. Last but not least, use the comments section below to expose other crypto scams.

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