Thinking of investing in bitcoin?
- Kim Thompson: Better Business Bureau
- January 16, 2018
- 1581
With all the buzz about bitcoin, more people are considering it as an investment opportunity. But with anything new and complex, con artists are there to take advantage.
With all the buzz about bitcoin, more people are considering it as an investment opportunity. But with anything new and complex, con artists are there to take advantage. BBB Scam Tracker has received numerous complaints from consumers fooled by phony bitcoin investments, often losing thousands of dollars.
The scam works like this: You are looking to purchase bitcoin, so you search online. You find a legitimate-looking website that offers to mine the cryptocurrency for a fee. (Bitcoin is created by mining, using special software to solve complex math equations.) The website asks you to pay upfront, and bitcoin will be transferred into your account. However, after you make the payment, nothing happens.
Other versions of this scam target investors trying to convert bitcoin to their local currency. For example one consumer used a service to exchange bitcoin for U.S. dollars and transfer the money into a PayPal account. However, the transaction didn’t work as planned.
“My bitcoin account showed that the transaction went through, but the transaction timed out,” the report said.
Canadian consumers should be especially cautious. BBB has received complaints about apps that allow Canadian customers to purchase bitcoin, but they do not support selling it. As one consumer said, “Basically they tell you to buy bitcoins with their app, knowing you’re in Canada, but once you put your money in, they don’t allow you to take it out.”
How to avoid bitcoin scams:
Do your homework. Read about the technology underlying the bitcoin system. You need to know how it works if you want to manage and invest effectively. Make sure your sources are legitimate and not just those trying to sell you something.
Know where to store your bitcoins. It’s best not to store bitcoins in an exchange. Exchanges are sometimes vulnerable to hackers, whereas online wallets are considered a more secure place to store your currency.
Be cautious with your investment. As with all investments, never invest money you can’t afford to lose. Investments come with risks, and digital currency is still in a very early stage of development.
Review BBB online shopping tips. Many online purchase scams use similar tactics, and bitcoin is a growing payment method for scammers. See www.bbb.org/shoppingonline for more advice.
Read more on www.BBB.org about online purchase scams and investment cons. To learn more about scams, go to BBB Scam Tips at www.bbb.org/scamtips.
Visit www.bbb.org/canton or call 330-454-9401 to look up a business, file a complaint, write a customer review, report a scam with Scam Tracker, read tips, follow us on social media and more.