Users can avoid Ponzi schemes if they apply the principles of Bitcoin and blockchain. Daiana Gómez recommends being cautious about altcoins as many of them do not add any value.
Daiana Gómez Banegas, of the NGO Bitcoin Argentina, gave guidelines to prevent fraud with Bitcoin and other cryptocurrencies. She mentioned several types of crypto-asset scams: phishing, transaction scams, and pyramid schemes.
Gómez Banegas said that the pandemic led many to turn to the world of cryptocurrencies. She added that this has caused the data of millions of people data to reach cyberspace. However, some criminals have exploited vulnerabilities there and committed scams.
Identity Impersonation in Bitcoin Operations
Many criminals have breached phone lines or emulated personal Facebook, Twitter, or WhatsApp accounts of users in the community. According to Gómez Banegas, they use those fake accounts to interact with people who want to buy or sell cryptocurrencies.
The expert explained that cybercriminals generally express that they have an urgent need to complete the operations. They usually say they propose those trades because they need cash or promise a more attractive price than the market.
The official of the NGO Bitcoin Argentina recommends ensuring to verify the identity of the counterpart. For example, she suggests requesting a phone or video call to confirm he is who he claims to be.
Scams During a P2P Transaction
Then, Gómez Banegas mentioned the possible scams that can occur during a p2p cash sale transaction.
She recommended that the person go to the meeting place with an installed wallet and not allow the broker to manipulate the cell phone.
The bitcoiner explained that it is possible to recover the password of some wallets through a QR code. She added that the broker could take advantage of that to seize the user’s private keys and steal the funds he has.
In a recent alleged fraud case in Argentina, the criminal used that strategy, said the victim.
Pyramid Cryptocurrency Scams
If someone offers money or huge profits, demands money to enter the system, or asks for referrals to increase profits, he is probably a scammer. In that way, Daiana Gómez presented the scam with Bitcoin and other cryptocurrencies known as pyramid schemes or Ponzi schemes.
According to Wikipedia, those financial schemes are a scam type that attracts investors, with whose funds they pay profits to previous investors. That source adds that victims believe that the profits come from legitimate business activities. They are generally unaware that other investors are the ones providing the funds they receive.
Gómez Banegas recalled that there is no owner, company, or referral system behind Bitcoin. In addition, she highlighted that bitcoiners do not earn a penny because a person enters the Bitcoin network and is a user. She explained that no one loses anything when users decide to withdraw all their money to get cash.
The Bitcoin expert warned that users should be vigilant and talk to those imposing such measures on them. She said that they could also be victims of a scam and do not want to harm them.
By Alexander Salazar
