At Luno, our number one priority is keeping our customers’ money safe. Without security, we don’t have trust, and without trust, we don’t have a business.
However, our responsibility to be the safest place to buy and store cryptocurrency extends beyond the Luno platform. As the price of Bitcoin has increased, scammers have started using mentions of it to lure people into their illegal schemes.
These scams have nothing to do with cryptocurrency, but they use promises of instant wealth to attract their victims.
For example, a scammer might set up a website that promises to double any amount of money you send them ‘using’ Bitcoin. A person who doesn’t know much about investing might not know that there’s no such thing as guaranteed returns and believe it’s a magical means of making money. So when the scammers disappear with their money, they may feel as if Bitcoin itself is a scam.
With that said, watch out for these common examples:
Ponzi / Multi-Level Marketing Schemes
These typically promise low fees and sky-high returns if you send them money. Revenue from later investors is used to pay later investors, making it seem as if the scheme is legitimate. But the whole thing collapses once new people stop signing up.
Ponzi schemes are easy to spot. With investing, returns are never guaranteed and it’s always possible to lose money – if anyone claims otherwise, it’s almost certainly a scam.
As these schemes are short-lived and run by dubious figures, you’re unlikely to find any verifiable information about the owners or their background. You might also notice that their website uses pushy language (perhaps with lots of CAPITAL LETTERS and exclamation marks!!), encouraging you to send them money straight away without researching first.
If you see any of these signs, don’t take the risk. Always do your research first.
Fake Bitcoin Wallets and Exchanges
Scammers also set up fake websites that pretend to be a cryptocurrency wallet or exchange. Unlike companies like Luno, they have no actual product – it’s just a way of getting your bank details or your money.
You should only deal with reputable, registered companies with a track record of good security, verifiable information, and mentions in news publications. Treat anonymous exchanges, apps and browser extensions with caution.
You can find a full list of known scams in communities like http://www.badbitcoin.org/theb
In summary
Cryptocurrencies are an exciting new technology, but it’s important to understand them before you make any purchases. Investing begins with education so always take the time to research. If you’re not sure,
And remember: if something sounds too good to be true, it probably is. For more information on how to keep your Bitcoin safe, visit Luno
