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Due to the sharp increase in the number of customer enquiries on this topic, we would like to use this blog post to provide clarity about the most common Bitcoin scams and warn our readers from them. Since the observed procedure is often particularly perfidious and sophisticated compared to other scams, people can easily be taken in by these scammers. In general:

  1. Be extra sceptical when investing in cryptocurrencies. Unfortunately, there are a lot of black sheep in this space.
  2. Discuss a potential investment in advance with your friends or obtain a qualified third-party opinion (Blockchain Innovation Group offers this free of charge).
  3. Do not let yourself be pressured into making the investment right now on the phone. Nothing is so urgent that it couldn’t wait a day to discuss it with someone.

Investment scam

This type of scam is known to most people by hearsay and is not at all specific to cryptocurrencies. It has already been used in the past to sell shares or other securities. Usually, the victim is contacted through a rather unusual channel (such as Facebook, Whatsapp or telephone call). In that call, the advantages of cryptocurrencies (such as high returns) are described. Often, the fraudsters also claim that they have developed a sophisticated trading algorithm that promises even higher profits to the “happy” investor.

The rule here is: If it sounds too good to be true, it usually is. Use your common sense to decide whether the promised return and the proposed procedure make sense. Always discuss the upcoming investment with someone who is familiar with that topic first. Or contact us via our contact form for a free evaluation. Even if the person on the other end of the line is exerting pressure, you should by no means act in haste. Moreover, exerting time pressure (the investment must be made right now for whatever reason) is a strong indicator of fraud.

Unfortunately, you can also NOT rely on Google or other search engines in this context (e.g. for rating websites). These are often created by the scammers themselves and praise the service in question in every possible way of course.
Should you decide to make an investment after a thorough examination, DO NOT let the corresponding investment company help you to make the transfer. Moreover, being overly helpful is another warning sign. Under no circumstances should you give the person in question access to your computer or your e-banking account by visiting a specific website or downloading a specific program.

If you have already been a victim of such fraud and have realized this, many fraudsters switch to phase 2 of the scam: the payback scam.

Payback scam

This type of fraud is, as already mentioned, the second phase of the investment scam and works as follows: The victim who has already been defrauded is contacted by a new person (usually a lawyer or law enforcement agent). This person then claims that the company that carried out the investment scam was raided by the police and that the victim’s customer data was found. Therefore, there is a good chance that he will get back his entire investment amount. However, one would have to make an advance payment to a corresponding account number. This is needed to cushion any fluctuations in the price of the investment or to cover legal costs. This scam comes in various forms.

Sometimes it is a raid, sometimes the operator of this scam has been arrested, sometimes the assets of the operator have been confiscated. What they all have in common is that they promise to repay the investment amount that the victim already has written off, provided that an advance payment is made.

The rule here is: Never make an advance payment to a person or company in the hope of getting back your lost investment amount. Law enforcement agencies would never ask for an advance payment and would simply deduct the corresponding exchange rate fluctuations from your investment amount if the fraudster had really been caught. Unfortunately, fraudsters have often created their own websites where these services are praised by customer reviews. However, these reviews are 100% created by the fraudsters themselves and aim to defraud the unsuspecting victim a second time.

What is particularly perfidious about this scam is that the fraudster on the phone already knows many details about you and uses this to his advantage.

Pump & Dump

Anyone who has seen the Hollywood film “Wolf of Wall Street” with Leonardo DiCaprio already knows this scam – albeit with shares instead of cryptocurrencies. Basically, it’s about getting the victims to buy certain cryptocurrencies in large amounts and thus drive up the price (pump). At the peak, the fraudsters then sell the cryptocurrencies they hold themselves and cause the price to plummet (dump). The victim remains sitting on his loss and owns de facto worthless cryptocurrencies.

Although this scam is no longer as widespread as it was in the crypto-boom year 2017, it still occurs. As soon as someone tells you that they can give you access to secret information and thus exorbitant price gains, walk away now! Either it is insider information or they want to use you as a price manipulator. You don’t want to have anything to do with either situation, because you will either be prosecuted or inevitably lose your money.


Ransomware particularly affects companies but also increasingly private individuals. The Swiss window manufacturer Swisswindows AG, for example, has even slid into bankruptcy due to the aftermath of such an attack (even though one must admit that the company already had its problems before the attack). Ransomware is basically about a Trojan (a kind of virus) that encrypts all data on your home computer (or company server) and thus prevents you from accessing it. The hackers then ask you to pay a ransom so that the data can be decrypted again. Usually this ransom payment must be in Bitcoin or other cryptocurrencies.

There is no absolute protection against such attacks. However, you can protect yourself as best as possible with the following three measures:

  1. Always keep your anti-virus program up to date and update your software (including Windows updates) promptly. If you don’t have an anti-virus program yet, now is the time to get one (also for Mac users).
  2. Surf the Internet consciously and do not click on every link or attachment that you receive by e-mail. Be sceptical.
  3. Make regular updates of your data (e.g. on an external hard disk) so that a backup can be accessed in case of an attack.

What should I do if I have been cheated?

Often, feelings of shame cause a victim of such a fraud to take no further actions and simply write off the respective amount in his mind. As understandable as this behaviour is, these victims help the fraudsters to easily scam other victims. Therefore, you should take the following three steps:

  1. Inform the National Financial Market Supervisory Authority (e.g. Finma in Switzerland, FMA in Liechtenstein, Bafin in Germany or FMA in Austria). This will help to ensure that the scamming and the extent of the national fraud sum is known. You can actively protect other potential victims through information campaigns by the Financial Market Authority.
  2. Report the matter to the cantonal prosecution authorities (police). Even if the chance of success must realistically be considered very low, a report will help to ensure that the prosecuting authorities have a basis for a potential criminal prosecution.
  3. Inform your friends. Even if this step seems to be even more difficult to take because of the feelings of shame mentioned above, you are helping your environment to avoid becoming a victim of the same scam. If the feelings of shame are too great, simply modify the story and tell your friends and family that you have read about such a case in the newspaper.

Do you have any further questions? You can also find lots of information on the website of Crime Prevention Switzerland. For example, you will find general information on Internet frauds and descriptions of other scams perpetrated by these fraudsters. More information can also be found on the website of cybercrimepolice.ch.

Please do not hesitate to contact us for a free assessment in case of doubt.

About Blockchain Innovation Group

Blockchain Innovation Group AG helps companies to leverage the full potential of Blockchain and other (Distributed Ledger) Technologies. No matter if you are looking for an education partner, someone to brainstorm and develop business models or to implement specific projects – We are your Partner!

We do that by bringing together thought leaders and international experts in all industries. This way, our clients can benefit from our united know-how and skyrocket their business into the future. We want to be your “Go-to” partner for any Blockchain, Digital Assets economy related business, commercial, legal, technology questions and support you implement and benefit from this significant window of opportunity.

You are interested in leveraging the potential of Blockchain? Waste no minute and contact us on biginfo@big-swiss.com or through our website. We are happy to help you.