🔥 Bitcoin fraud cases 2021: beware of scams & rip-offs
Again and again you read about new all-time highs, record highs and crashes - and there are also reports of hacker attacks. It may be profitable to invest your money in the crypto market, but the dangers should not be ignored. And volatility isn't the only danger to be aware of when pumping your money into Bitcoin and the like.
What are the most famous Bitcoin fraud cases in 2021, 2020, 2019 & 2018 and who is behind them?
Hacker attacks on certain stock exchanges were observed again and again and fraud with so-called shit coins was discovered. Probably the best known hacker attack? The attack on Mt.Gox. But the attack on Binance also caused a stir.
Ascent and end of Mt. Gox
Mt. Gox was one of the largest trading venues for the cryptocurrency Bitcoin. Founded in 2009, shortly after the Bitcoin was launched, it initially specialized in trading trading cards. It was not until 2010 that it was rededicated to the Bitcoin exchange. Within a very short time, Mt. Gox was able to gain in importance; In some cases, the exchange had become so strong that more than 70 percent of all Bitcoin transactions could be controlled.
At the beginning of 2014, Mt.Gox was the victim of a hack - and lost another 6 percent of all Bitcoins in circulation! At the time, that was 760.000 coins, which were then worth 460 million euros. Today the value - if one uses the current exchange rate of around 30.000 euros - would be 22,8 billion euros.
Mt. Gox subsequently filed for bankruptcy.
The founder of Mt. Gox, Jeb McCaleb, who subsequently made a name for himself as CEO of Ripple, later went to the digital currency Stellar Lumens.
The DAO attack
The DAO was a “d” e-central, “a” utonomous “O” organization and was at the same time an early attempt to get the various possible uses of smart contracts based on Ethereum off the ground. Ultimately, DAO was the first organization that could actually only be controlled by algorithms. The venture capital fund, on whose investments the shareholders could then vote on the basis of democracy, and which was based on Vitalik Buterin's Ethereum blockchain, was not a success. Even if you wanted to invest in non-commercial and commercial projects, such as so-called dApps, it was not possible to make the breakthrough.
However, this was not due to the responsible persons in the background, but to the hackers who discovered a vulnerability in the background and were able to steal Ether Coins worth around 50 million US dollars during the crowd sale. However, the hackers could not access the stolen goods because the ICO was still running and the funds on the blockchain were therefore "frozen". This means that the investments were locked in the smart contracts for 28 days.
Subsequently there was an Ethereum update, which however made a hard fork necessary. Ethereum Classic, another cryptocurrency, was created.
By the way, it is not known who the hackers who attacked Ethereum were.
Why Bitconnect became worthless
Bitconnect was its own digital currency, which even had its own exchange - from the beginning, Bitconnect had to deal with the allegations that it was about the Ponzi scheme. Today Bitconnect is an example of so-called Bitcoin Scams.
Started in February 2016, Bitconnect has long been one of the most successful cryptocurrencies on the market. The cryptocurrency users were encouraged to recruit new users - and rewards were then given for this service. The company's own crypto currency BCC was distributed. According to the operators, 120 percent were possible per year. Of course, there were some crypto fans who couldn't believe their eyes when the investigative authorities suddenly filed a case against Bitconnect.
After the crypto currency BCC reached an all-time high of almost 2018 US dollars in January 440, it suddenly went steeply downhill - towards 1 US dollar. Because the US supervisory authorities warned the company and then forced the closure of the crypto exchange.
The one coin that became the shit coin
So-called educational packages were sold to investors here. The educational package made it possible to access the online portal, which then contained manuals and videos on the One Coin cryptocurrency. Depending on the package, there was then a certain amount of tokens or coins.
Again and again there were forecasts that made the One Coin value rise astronomically. The One Coin should be even better than the Bitcoin. In the end nothing happened.
But why have so many people invested in the One Coin cryptocurrency? In the end, the feeling was actually conveyed that the One Coin could soar as well as the Bitcoin. And since the One Coin was being offered at a time when the Bitcoin hype was experiencing a wedding, it was the "second chance" for many people to enjoy the cake.
In the end, however, it was a classic pyramid scheme with a worthless coin: Because only by selling further products was it possible to keep the system alive - and it was therefore clear that the founder of the One Coin, Ruja Ignatova, was only supposed to be serious pretended.
Not every trading robot makes a profit
Again and again one comes across trading robots on the Internet that promise high profits without risk. First of all: there are automated trading systems with which profits can be made - that is, these are not automatically illegal or dubious systems. However, caution is advised.
The more profitable and risk-free trading with the trading robot is advertised, the riskier it may be. Since there are some "black sheep" on the market, you should be particularly careful and always pay attention to the experience reports that can be found on the Internet.
Ethereum Classic Hack
The Ethereum Classic cryptocurrency was hacked at the beginning of 2019. At that time, the hackers managed to attack the blockchain network and steal coins worth (then) 1,5 million US dollars. Today we know that it was possible for the hackers to gain control of the mining network and were able to reorganize the blockchain so that the currency was issued twice. Coinbase, one of the most famous trading venues, has stopped trading Ethereum Classic.
When celebrities advertise dubious business with Bitcoin and Co.
Whether by e-mail, in the user's news feed or as advertising in social networks - when celebrities like Dieter Bohlen or Yvonne Catterfeld claim that they are “ending their careers” because they “got so rich”, then that is the first Step onto a dubious website that tries to pull money out of people's pockets with a dubious product. It is important to be careful here and, if you think the news is real, research the Internet to see whether it is sometimes the truth or a so-called fake.
The attack on Coincheck
At the beginning of 2018, after many crypto currencies had already found themselves in a downward spiral, after Bitcoin reached its all-time high of almost 2017 US dollars at the end of 20.000, another hacker attack followed. At that time, it was the turn of the Coincheck exchange - coins worth 500 million US dollars were stolen.
Six months later, the attack on Bithumb took place
Six months later, in June 2018, Bithumb was attacked. The hackers were able to steal coins worth 30 million US dollars.
Binance has also been hacked
Binance's hack that resulted in 7000 bitcoin being stolen has also made crypto history. The shock was enormous when it became clear in May 2019 that the Binance exchange had been hacked. Within a very short time, the Bitcoin price even fell by several hundred US dollars.
After Binance was hacked, the big exchanges, including Kraken, Huobi, Poloniex and Coinbase, joined forces to create a blacklist for the Bitcoin addresses on which 7000 coins were subsequently transferred.
How can you protect yourself from Bitcoin fraud, rip-offs and scams?
If you want to invest your money in Bitcoin and Co., you should of course be careful not to invest the money in fraudulent projects. The following signs should always lead to the fact that one is prudish or critical:
Exaggerated promises are made
Offers that are advertised with a very high return or that deal with the fact that you will achieve a passive income for eternity and achieve financial freedom in a few months should be ignored. Of course, you can achieve high returns with Bitcoin - especially if you look at the price development between mid-December 2020 and mid-January 2021. But there is no guarantee that this will continue. Corrections are always possible.
The company operates from abroad
A seat abroad does not have to automatically mean that it must be a fraudulent project. However, it is important that the company is regulated. If there is no regulation or license, it is better to stay away from it.
Lack of transparency
You should also be particularly critical if only little information can be found on the homepage. The more "mysterious" the company or the homepage, the more critical one should become.
The imprint is missing
And if the imprint is still missing on the homepage shown, you should pay particular attention. In 99 percent of all cases, this is then fraud.
When you have to refer friends
Anyone who invests in Bitcoin needs the appropriate capital and access to the crypto market - for example via an online broker. However, it will never be necessary to refer a friend who then also buys Coin in order to receive a corresponding profit or to receive a bonus payment. Systems of this kind, which talk about making friends, should be completely ignored.
Bitcoin is not a scam: Bitcoin is not a scam per se, but there are many scammers who use Bitcoin as a rip-off.
Bitcoin is not a scam. Ultimately, Bitcoin is a cryptocurrency, the price of which is determined by supply and demand; That Bitcoin is of course also seen as an object of speculation is no surprise after the bull run, which was observed between mid-December 2020 and mid-January 2021.
In conclusion, it can be said that Bitcoin is not a scam, but a cryptocurrency. However, the Bitcoin is often used for fraudulent purposes - and that is exactly the main problem when it comes to working with the Bitcoin. To prevent this, you should always use a reputable broker like eToro to trade Bitcoin.
Our conclusion: only trade with Bitcoin from reputable and licensed providers
If you want to speculate with Bitcoin or invest in crypto currency, you should therefore look for a reputable online broker and then put your money in the crypto market. Various projects or plans that have to do with Bitcoin but deal with the fact that you have to make friends or sometimes purchase basic packages in order to get shares are to be rejected.