AVOIDING BITCOIN SCAMS
CoinGenie wants you to beware of scams involving Bitcoin and other cryptocurrencies. From time to time, we hear from customers who have unwittingly fallen victim to fraud and scams. As a Bitcoin ATM operator, CoinGenie acts as an on-ramp for many to exchange US dollars for Bitcoin. In some cases, people who use our services may not be familiar with Bitcoin and may even be using it for the first time. Therefore, it is important that our customers understand that Bitcoin is a decentralized digital asset operating on a global scale. This means that there is no central authority like a bank or law enforcement agency that can assist you in getting your Bitcoin back if it is sent to a wallet that you do not have control over. Furthermore, transactions that are sent over the bitcoin network, including ones sent from our machines, occur immediately and are irreversible. This is the primary reason that our machines provide so many scam warnings and ask our customers to pledge to us after scanning their wallet QR-code at our machines that they do in fact have control over any wallet address that they scan in. Remember, once Bitcoin is sent, that transaction cannot be canceled, reversed or refunded in any way. In order to protect our customers, we want everyone we do business with to beware of the following scams:
COMMON BITCOIN SCAMS
Government Impersonation Scams
This is the most common scam. There are a few different variations, but they all take the form of a fraudster impersonating a government agent from the IRS, Social Security, or some other government administration. The scammer will contact the victim over the phone and may threaten jail time if the victim does not pay a supposed debt. Alternatively, they might also state that “scammers” have access to your bank accounts and funds need to be immediately sent in order to prevent their accounts from being drained. In many cases, the perpetrators may have some information about the victim which will give them some perceived legitimacy and they may be spoofing a telephone number to make it appear as though they are calling from a government office. The scammer will provide the victim with a QR code and direct them to a Bitcoin ATM in order to make the payment. This scam relies on the victim panicing and following their directions to make a payment without a second thought. Do not make any payment. This is a scam.
Utility Impersonation Scams
This scam is similar to the above except the perpetrators will pretend to be from a utility company and threaten the victim with shutting off their electric or other utility services if a payment is not made immediately. The scammer may spoof their telephone number to make it appear that they are calling from your utility company. The scammer will provide the victim with a QR code and direct them to a Bitcoin ATM in order to make the payment. This scam relies on their ability to cause the victim to panic and follow their directions to make a payment without a second thought. Do not make any payment. You can simply hang up and call the phone number of your actual utility company in order to verify that your utilities are not due to be shut down.
Ponzi / Pyramid Schemes and Fake Crypto Exchanges
These schemes generally offer a guaranteed return in exchange for an upfront deposit. Often, the rates of return being promised are unusually high. The website may look extremely professional and allow for the victim to log in and track their investments. These scams may use complicated jargon such as forex trading, mining, binary options, or claiming that they have a “new” or “better” digital token that will earn a higher rate of return than bitcoin. One of the biggest warning signs are promises to pay a specific percentage of earnings weekly or daily, and there are often other bonuses given for referring other people. Ultimately, the scammers will deny the victim’s attempts to withdraw their money from the Ponzi scheme. Always do your research and remember that if an investment is guaranteeing you a return, it is too good to be true.
Fake Merchandise & Online Sales Scams
This type of scam promises deals that are too good to be true on high value items such as cars, apartment and vacation rentals, and concert tickets. The scammer will provide a compelling story involving the death of a family member or a military deployment that will explain why they are offering the product at such a reduced price. They will provide the victim with a QR-code in order for the victim to send them money and will disappear as soon as the funds are sent.
Money Mule Scams: Job and Romance Scams
Money Mule scams have a few different variations but they are all based on the same premise: Money is deposited into the victim’s bank account and then the victim is directed to withdraw the money from his or her bank and send it to criminals. In this case, the victim sends the money to the criminals by depositing it into a Bitcoin ATM using the criminal’s wallet QR-code at the machine. The reality is that the funds being deposited into the victim’s bank account are stolen and the victim has been recruited as a “money mule” to unwittingly participate in money laundering. Eventually, the fraud will be reported to the bank and the deposits made to the victim’s bank account will be reversed, causing the victim to owe money back to the bank. We have seen a few variations of this scam:
In a job scam, the victim is led to believe that they have been hired by a company and they are directed to make deposits into the machine on behalf of their “employer.” The victim may be given other tasks to do in addition to withdrawing and sending money in order to convince them that this is a real job, but the primary purpose of the victim’s activity will be to withdraw the stolen funds from their own bank account and then send them using the Bitcoin ATM.
In a romance scam, the scammer takes advantage of victims looking for romantic partners on dating websites, apps, or social media. The scammer will emotionally manipulate his or her victims by pretending to be a prospective companion. The scammer will generally claim to be from a western country but say that they are traveling for work. The scammer might spend hours on the phone with the victim, and will go to great lengths to gain the victim’s trust by sharing personal stories, loving words, and even expensive gifts. This may happen over many months. Eventually, the scammer will ask for money, often by pretending to have a personal emergency or claiming that the money is for traveling to visit the victim. The request for money could also come in the form of persuasion to invest in a new business opportunity.
Remember: Bitcoin Transactions are Irreversible. Don’t Fall for Scams!
If you are unsure whether or not you are being scammed, please call CoinGenie support. We may not be able to determine with absolute certainty whether or not something is a scam, but we can take a look with you and help you determine the risk. Remember, bitcoin transactions, including those from our machines, happen immediately and cannot be canceled or reversed. You should always err on the side of caution.
Stay Safe CoinGenie!