How to buy your Bitcoin safely
Thought cryptobros were bad? Think again.
Important points
- Scammers steal money by advertising fake investments or romantic offerings.
- Scammers reach out via Instagram DMs and other social media accounts.
- Buy Bitcoin safely by only buying coins through exchanges.
Bitcoin has been a phenomenal investment for many. It has appreciated 2,500% since 2013, from $99.99 to around $25,000 per coin. But crypto is confusing, and scammers like to take advantage of people who are unsure about how to invest in Bitcoin.
Fraudsters have stolen over $1 billion worth of crypto (mainly Bitcoin) between 2021 and 2022, according to a report by the US Federal Trade Commission (FTC). Not even romance is safe from scammers – romance scams are one of the most common crypto scams out there.
Most Common Crypto Scams
Crypto lacks regulation. People are not sure who to trust. The 2022 FTC report lists the biggest crypto scams that traders should watch out for:
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- Investment-related fraud
- Romance scam
- Business fraudsters
More than $500 million in fraud boils down to fake investments. Scammers are contacting crypto-curious Americans and claiming they can earn huge investment returns. And why not? After all, people have made millions investing in coins that sound as ridiculous as Dogecoin, right? (Fun fact: Dogecoin has increased by over 1000% since its inception.)
Scams can be convincing. I wanted to know – I almost fell for one.
Here’s what it’s like to be scammed
A scammer pretending to be one of my favorite YouTube accounts claimed they were releasing “free crypto” as an experiment. I had to send them some Bitcoin to verify I was real (in retrospect, a huge red flag). I literally typed “how to transfer Bitcoin” into Google when it occurred to me that, hey — this might be a scam!
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Got started
I am a digital native. Over half my life is spent online. I have seen scams – they have siphoned money from older family members who are less digitally savvy than me. They were clumsy, and in retrospect they seemed obvious. I invest in cyber security software and do my due diligence.
Despite all that, I almost fell for a spam account that probably took five minutes to set up. Yeah. Talk about humbling. According to the FTC report, the average victim loses $2,600 in crypto. I lost almost half – enough money to start a solid emergency fund.
As I scrolled through the scammer’s account, rage building after my all-too-close call, it occurred to me: If someone like me can fall for a low budget scam, anyone can.
How to Spot Crypto Scams
Scammers are like clingy exes — they linger in the DMs of your favorite social feeds. According to the FDIC report, 40% of fraudsters contacted victims over social media (mainly Instagram). These hucksters play by the same tactics that make them easier to spot.
Three rules of thumb:
- If someone guarantees you a profit on your investment, they are scamming you.
- If someone asks you to buy crypto, they are scamming you.
- If a digital date asks you to move crypto anywhere for any reason, it’s a scam.
Sorting through the nonsense is enough to make the average investor want to pack their bags and wait out this whole “crypto thing”, potentially missing out on diversified returns. But it is possible to outsmart the scammers and buy your Bitcoin safely.
Stick to crypto exchanges
Scammers can put a lot of effort into extorting your money. They will take advantage of your confusion about crypto and digital wallets. Worst of all, they will break your heart when they rip you off. (See the sad violin music.)
How to avoid being scammed?
The easiest solution is to stick with one exchange for all things crypto. Avoid wallet-to-wallet transfers with strangers on the Internet. Buy and sell currency directly through recognized exchanges. Stick to well-researched currencies like Bitcoin or Ethereum to avoid rye drafts, a type of crypto scam that ends in collapsing crypto prices.
Crypto exchanges will never ask for money, and they certainly won’t guarantee you sky-high returns. (Not without getting a sideways glance from US regulators, that is.) They also won’t try to ask for nude photos they can use to blackmail you for coins (the FTC report gets very specific).
The best cryptocurrency exchanges offer guides for investing in your favorite crypto and the information you need to decide if an investment is right for you. Spoiler: No crypto is 100% guaranteed to make a profit. Not even Bitcoin.
Don’t want to deal with fraud? Stick to crypto exchanges, as the best places to buy Bitcoin safely. It is easy and one of the safest ways for ordinary people to diversify their investments. Or avoid crypto altogether – whatever the decisions, investors have options.
