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Common Cryptocurrency Scams, How to Recognise Them and What to Do if You Think You Have Been Scammed

How to Report a Scam in New Zealand

Scams need to be reported. Yes, it can be very hard to admit you’ve been a victim of a scam, but those very scammers rely on your silence so they can target others.

You are welcome to contact us via email for a confidential conversation if you are a scam victim or know anyone who may be a victim: fraud@bitprime.co.nz.

If you think you have been scammed:

  • Stop ALL contact with the scammer
  • DON’T send them any more money or cryptocurrency
  • Call your bank immediately
  • Call the Police on their non-emergency line 105 (unless yourself or someone else is in immediate danger, in which case call 111)
  • If the scam involved cryptocurrencies, you are more than welcome to ask us for further advice
  • Change your email account, bank account, BitPrime account, and all other relevant passwords to unique, strong ones
  • Talk to a friend or family member that you can trust – don’t suffer in silence.

Resources to Help You if You’re the Victim of a Scam

Little Black Book of Scams

The Commission for Financial Capability has published a FREE 24-page booklet available from its sorted.org.nz website. A range of different common scams is covered. These include investment scams, identity theft, romance scams, tax scams, and many more. We highly recommend everyone familiarise themselves with the information in the booklet to ensure you and your loved ones know what to look for.

You can either download it as a PDF file or request a copy to be posted to you. The title of this is The Little Black Book of Scams. Alternatively, you can view the PDF file saved to our site by clicking on the image below:

common scams

Sorted also have a useful page covering various aspects of scam and fraud protection.

Netsafe

Netsafe is a non-profit online safety, help and advice website for New Zealanders, including the ability to report scams. They’re supported by the Ministry of Justice and the Ministry of Education and cover other topics such as online bullying.

Scamwatch

Another helpful site is Scamwatch, produced by Consumer Protection, a part of the Ministry of Business, Innovation and Employment.

Info on Common Cryptocurrency Scams

The last section of this page contains information on some of the different scams we often see involving cryptocurrency. Also, we have several articles covering different types of crypto scams in more detail in our blog.

NZ Police

The New Zealand Police publish a valuable resource to help identify different internet scams.

 

 


Entities Showing
Hallmarks of a Scam

  • d.ai.sy (otherwise known as Daisy Tron, Daisy TRX, Daisy Crypto, or Daisy USDT)
  • Hyperfund (otherwise known as Hypertech Group, HyperCash/HCash/HC, HyperCapital, HyperDAO, Hyperverse or HyperCommunity) – FMA article: fma.govt.nz/news-and-resources/warnings-and-alerts/hyperfund/
  • Evorich (otherwise known as New Economic Evolution of the World/NEEW, Skyway Investment Group/SWIG, Skyway Capital, Skyway Group, or RTN Limited) – FMA article: fma.govt.nz/news-and-resources/warnings-and-alerts/evorich/
  • Cash FX (otherwise known as Cash Forex Group) – FMA article: fma.govt.nz/news-and-resources/warnings-and-alerts/cash-forex-groupcashfx/

Why We (BitPrime)
Believe They Might Be Scams

  • Firstly, all operations have many warnings signs of an investment scam (as per the FMA’s website, and signs of fraud as per the SEC.
  • None of these entities is registered on the Financial Service Providers Register. They are all providing financial services to persons in New Zealand; therefore, they should be registered and subject to the laws and regulations of this country.
  • All entities offer guaranteed returns. It would be best to examine promises of high, consistent return for little risk very sceptically.
  • The fee structure and strategies are difficult to understand. The websites of these entities appear to have little or no information about the entity’s fees or structure.
  • Customers buy “packages”, and to get the bulk of your funds, you need to sign up other customers.

Common Cryptocurrency Scams & How to Identify them

white-computer-keyboard-with-red-keys-that-says-scam-alert

Crypto Investment Scams

Have you come across a website that promises guaranteed returns and says they can invest your crypto/money for you? This could be an investment scam. The warning signs of an investment scam (as per the FMA’s website, and signs of fraud as per the SEC) are as follows:

  • The entity isn’t registered on the Financial Service Providers Register. If a business is providing financial services to persons in New Zealand, they should be registered and subject to the laws and regulations of this country.
  • The company offers guaranteed returns. It would be best to examine promises of high, consistent return for little risk very sceptically.
  • The fee structure and strategies are difficult to understand. The websites of these entities often have little or no information about the entity’s fees or structure, let alone how you get your investment returned to you.
  • Customers buy “packages”, and to get the bulk of your funds, you need to sign up other customers. This is typical of how MLM works, and while there are legitimate MLM-type businesses (think: Avon), when it comes to crypto, we are yet to find one that is.
  • The salespeople pressure you into making a hasty decision, or they’re constantly calling, emailing or messaging you. It would be best if you always talked to a financial advisor about any financial decisions you’re committing to. Alternatively, trusted friends or family members can be a good source of alternative viewpoints. Try to speak to someone removed from the situation for the most impartial advice.

Graph showing increase in cryptocurrency investment scams

Crypto Trader Bot Scams

Has a salesperson or a website stated that they have fantastic technology that can time the market and give you guaranteed returns? This is likely a trader bot scam, a variation on investment scams. You’ll see a similar pattern to the investment scam: they give guaranteed returns for no effort. If you don’t know how the trading system works, don’t trust it. Also, they tend only to let you use wallets that they host, and, ultimately, they’re the only ones who have control of any assets held in that wallet.

With a crypto wallet that you control, even if the app goes out of business, with the twelve-word phrase that you’ve written down securely (we recommend you keep a second copy of the key phrase with your will), you’ll be able to recover your funds. If you don’t understand it, you probably shouldn’t get involved until you do.

Warning! A Storm is Brewing Over Increased Trader Bot Scams

Crypto Multi-Level Marketing Scheme (MLM) Scams

Has someone asked you to invest in a scheme they need to sign you up for and refer others to? This is likely to be a multi-level marketing scheme (MLM). The bulk of income for these entities comes from recruitment which is characteristic of MLMs (aka network marketing, referral marketing, direct selling etc.). While we aren’t implying that all forms of MLMs are fraudulent, studies have found that of participants in MLMs, between 75% and 99% lost money. For more information, please read these two studies:

The Case (for and) against Multi-level Marketing

Multi-level Marketing: “The Research, Risks and Rewards”: An Executive Summary Presented by AARP Foundation

Generally speaking, the way to make money in an MLM is to sign up others. Consider how you came across these entities. The person who recruited you needs you to sign up for them to “earn” money. Do they have your best interest in mind? They may be well-intentioned, but they are likely taking advantage of your good nature for their own financial gain.

Crypto Romance Scams

Have you met someone from another country asking you to send them money? Although this is a very sad kind of scam, you could be involved in a romance scam. You may call them and see them every day, but these scammers are very skilled at convincing you of the depth of their feelings for you.

We recommend you never send funds internationally to someone who has not explicitly earned your trust and that you don’t know in real life – and social media and other online options don’t count!

If you send money via cryptocurrency, you cannot get your money back; remember that transactions are immutable. Business contracts can be falsified, and you could lose your funds.

Graph showing increase in romance scams
Note: This graph isn’t specific to cryptocurrency.

Crypto Recovery Scams

Have you been scammed before? There are some scammers out there that specifically prey on people who have already been victims. This is called a recovery scam. There are two ways to tell if a recovery scam is targeting you:

  • They contact you first and ask for money up-front. If someone is calling you to establish a business relationship, especially out of the blue, it’s never a good idea to give them money until they have delivered their product.
  • The company is not based in New Zealand. If it’s an offshore company, it’s imperative to investigate them thoroughly. What country is it based in? Does that country have strong financial regulations? How are you sure that they’re where they say they are or who they say they are? If something goes wrong, how will you get your money back?
  • They claim to be from an organisation that carries some repute. Government agencies and legitimate organisations will never ask for money to help get you a refund. No government agency will ask for your personal information or financial details. If you have any doubt, you can google to check the organisation’s legitimacy and see if the institution has actually contacted you. It is better to take a day to ensure the validity of the person’s identity than to rush into losing money.

Crypto Remote-Access Scam

Has someone called and asked to have remote access to your computer? A remote-access scam happens when a scammer, often posing as technical support, requests remote access to your computer or device. The scammer could install any virus or information-gathering software on your computer, including stealing the password for your internet banking.

Letting an unknown person onto your computer could compromise your online and financial security. The scammer also can commit identity theft. If this has happened to you, call your bank at once, and they will help you protect your account and your assets.

Crypto Impersonation Scams

Did you see an article about investing centred on Jacinda Ardern, Mike Hosking or another famous person or well-known media personality? This could be an impersonation scam, where the scammers make up situations that show the famous person buying their product or investing in their scheme. They then publish articles on sites that look identical to news sites we use, such as Stuff, Interest, etc. (carefully check the URL, and you’ll see it isn’t the site it claims to be).

This is very similar to an investment scam, as above. If it sounds too good to be true, it probably is! Jacinda Ardern won’t tell us the way to get rich, unfortunately. Always consider the author’s reasons for writing an article.

Crypto Phishing Scams and Spoofing Scams

Phishing scams and spoofing scams are neither new nor restricted to crypto trading. Essentially, this scam type tricks unsuspecting victims into handing over private information like usernames, passwords, secret question answers, identity documents, credit card details etc. You’ve likely come across this type of scam concerning your bank account or Inland Revenue! New Zealand banks constantly post banners and warnings on their sites about the latest scam doing the rounds.

Often, these scammers send you a message via emails, text, or social media, pretending to be a company you use and trust by copying the logos and message templates of the authentic company; they may even call you. They then spin a made-up story about your account credentials needing changing, suspicious account activity happening, payments failing, or a plethora of other stories to bait you into clicking on the link they provide to “log in” to the so-called compromised account. You then end up on a fake website that mimics the genuine one. When you enter your information, the scammers collect it and use it themselves to gain access to your real accounts.

If you’re ever unsure an email is genuine, contact the company to ask if they sent it to you. Just ensure you use the company’s correct contact details and not any provided in the message you were sent. As for checking if the website you’re visiting is the real deal, check the URL (web address) carefully! For example, scammers might include a diacritic (macrons, accents etc.) to make the address look correct. E.g. Instead of www.bitprime you might see www.bítprime.

Crypto Giveaway Scams

In giveaway scams, con artists promise free cryptocurrency if you confirm your wallet address by first sending some amount of crypto to them; some claim they’ll send you double or even triple what you initially send them. They’re rampant all over social media channels like Twitter and Facebook and made to appear legitimate by multiple fake profiles then commenting on the original post saying how much they sent and received. Please, don’t be tempted by this sort of lie!

Here is a prime example! The comment at the bottom is by a fake account using the name “BitPrime”. The scammer has commented on a real post shared by the official BitPrime Facebook page. You’ll then notice several other fake profiles commented that they received the so-called award.

 

A quick-fire way to see this page isn’t the real BitPrime page is by hovering over their profile name. You’ll see the pop-up is blank with no company information.

 

By contrast, here is what the official BitPrime Facebook page shows when you hover on the profile name; our contact details, website link and a description of what we do.

 

Crypto Job Scams

According to a report written by the Better Business Bureau, an estimated 14 million people have lost NZD 2.3 billion due to employment scams, with more and more involving cryptocurrency. Many involve disclosing private information such as email and bank account details. In some cases, job seekers were asked to provide an upfront payment to the company on the condition of employment. In one example, the employer instructed someone to place $3,000 into a Bitcoin ATM as one of their first duties. When they questioned the task, their “employer” simply disappeared.

Fortunately, there are a few things that you can do to avoid falling victim to these types of scams. A good idea is to create a separate email address explicitly for job hunting; then, when you find a promising position, have an alternative bank account set up for income earned. Taking these steps hopefully limits the damage done by any attempt at identity theft.

Secondly, always check and double-check companies advertising job vacancies; you can do this with a simple Google search of the company website. Most businesses have a relatively large online presence, so not having any could be a red flag. Keep on the lookout for any vague-sounding job titles or descriptions, and be wary of jobs that require you to receive and send packages or handle large amounts of money.


 

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3 thoughts on “Common Cryptocurrency Scams & What to do if You’ve Been Scammed”

  1. I opened a brokerage account with Paragon Finance UK back in 2020, first ever investment. About 6 weeks ago they contacted me claiming I had earnings on my investment and I needed to transfer back to my acct, as they where soon closing the platform. To cut a long story short my investment earnings are still six weeks later sitting in Custody at BitStamp and unable to redeem any of it. I have have provided the all the international transfer details to my account, on several occasions, I keep getting the front desk and can’t get any more than I’ll tell to my colleague, when I last spoke to front desk they told me they had terminated my acct ???? without even notifying me, do you have any suggestions?

    Reply
    • Hi Lynn,

      I am very sorry to hear this. It very much sounds like you are the victim of a scam. Please follow the instructions in the above article to report this to the relevant authorities and to also find a support network.

      I will also send you an email with some further advice.

      Kindest,
      Victoria

      Reply

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