How to know Bitcoin scammers and stay away from them

Ponzi Schemes

As Bitcoin has been growing both in popularity and market-cap, it has been a target of fraudsters and scammers. There have been several cases of fraud in the past and seems like fraudsters are coming up with new ways to scam people.

Bitcoin is an attractive target for them as is fast, private, and irreversible. Following are the some of the most common scams nowadays which innocent people fall prey to them.


Phishing is the attempt to get sensitive information such as usernames, passwords, credit card details etc by disguising the user as a trustworthy entity in an electronic communication.

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There have been many events in the recent past where fraudsters have cloned popular bitcoin websites and have stolen coins. After cloning the websites the fraudsters run ads at different places to lure innocent people to click on them. The users think that they are visiting the real site but in reality, they are visiting a cloned site.

Real vs Fake Zebpay Twitter Account

Someone tried to scam our users using a fake twitter account and asked them to deposit a certain amount as a part of a survey and promised that once they have completed the survey, they would be credited double the bitcoins that they had sent. Thankfully, none of our users fell for this and no one lost their funds. The fake Twitter account has now been suspended. Our only official account is @zebpay.

Solution: Always check the URL of the website you are visiting. Double check social media accounts/usernames before you begin a conversation. Do not ever click on suspicious email links. Always check if the site is served over HTTPS and has a valid certificate when sharing personal and financial details.

Bitcoin Wallets/Apps/Plugins/Extensions

Fake wallets have been a real nuisance recently after various users have complained about fake wallets on Apple Store. Many suspicious looking apps that look like the real apps have surfaced and many users have complained about their funds getting stolen after downloading such apps.

Here are some of the fake wallets identified by a user on Reddit:

Most of these are now deleted from the App Store, but still, if you have downloaded them we would suggest you transfer your funds to a safe place and remove the apps from your phone as soon as possible. There have also been cases where QR codes and bitcoin addresses have been changed by malicious Browser Extensions.

Fake LocalBitcoins app on the Google Play Store

Solution: Only download apps from the official app stores. Don’t download from any 3rd party app hosting sites. Always check for the correct spelling of the website/app/extension you are visiting or downloading. Contact customer support if something doesn’t seem right.

Bitcoin Ponzi Schemes, High-Yield Investment Programs or MLM

A Ponzi scheme is an investment fraud where clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all their energy on attracting new clients to get them to make investments. As with most of the Ponzi Schemes, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

High-yield investment schemes (HYIP) usually advertise yields of more than 100% per year to lure in victims. In a case, SEC v. Shavers, the organizer of an alleged Ponzi scheme advertised a Bitcoin “investment opportunity” in an online Bitcoin forum. Investors were allegedly promised up to 7% interest per week and that the invested funds would be used for Bitcoin arbitrage activities in order to generate the returns. Instead, invested Bitcoins were allegedly used to pay existing investors and exchanged into U.S. dollars to pay the organizer’s personal expenses.

Solution: Use common sense. As they say, if it looks too good to be true, it is most likely a scam. Check about their legitimacy on forums, chat groups etc. If someone promises high returns and guarantees that you won’t lose money, you should take a step back and research more. Don’t listen too much to people who say the scheme is legit, they don’t realize it until it is too late.

Bitcoin Mining & Cloud Hashing scams

Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. It is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Mining scams usually have companies selling mining equipment that is paid for in advance but is usually never delivered. Cloud hashing enables users to purchase mining capacity that of hardware in data centers. Bitcoin cloud mining enables people to earn Bitcoins without having bitcoin mining hardware, bitcoin mining software, electricity, bandwidth or other offline issues. These scams are usually unverifiable as you don’t have physical access to the hardware.

Solution: Ask for valid proofs of possession of mining equipment. Look out for overpromises and guarantees on returns. Find all the information about the company, its location and everything you can find about their owners. Cloud Hashing companies can stop payouts by telling the customers that the mining difficulty has increased, so there are chances that the users don’t even get back their initial investment. If you feel something fishy is going on, withdraw all the payouts that you have received so far as soon as possible.


You should always research everything about a project/company/scheme before you invest your hard-earned money into it. We suggest you look out and ask about that project or scheme on Forums, Social Media, Chat Groups etc. You should watch videos and read whitepapers which explain the project/scheme in detail. You can check the ratings and read reviews on various sites. There are different sites like badbitcoin,, bitcoinscammer, behindmlm etc where you can find lists of fraudulent bitcoin companies.

Whenever dealing with strangers, use an escrow service if you can. An escrow service allows safer payment by securely holding a buyer’s coins in escrow until the terms of the sale are met and as a result, the buyer releases payment to the seller. In most cases, no dispute is filed and no 3rd party action is needed. Scammers usually ask for payment first before they send the goods/bitcoins or anything that the customer wants and when they receive the payment, they are gone and so are your coins. You don’t want something like this happen to you.

Finally, use rational thinking before getting excited and associated with anything in this new world of cryptocurrencies. Trust your instincts. If something sounds too great to be true, it probably is a scam! If you get into any of these scams, get out of it as soon as possible. Bookmark the sites you frequently visit. Change passwords after certain intervals.

Stay Safe!

Written by Zebpay is a Bitcoin exchange based in India

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