How to tell if a Bitcoin website is a Scam
Like many other new and emerging industries, Bitcoin has been adopted by people keen on setting up scams and schemes to steal your money.
To stay safe in this rapidly growing market, your best bet is to familiarise yourself with the most commonly observed Bitcoin scams to help protect yourself and your digital assets. Take our quiz here to learn about some of the common scams we hear about.
If you are ever dealing with a website to buy, sell, or invest cryptocurrencies, it is very important to make sure you are dealing with a legitimate site.
There are several ways that can help you tell if a Bitcoin website is legit. Follow the checklist below to make sure you are dealing with a genuine, reputable service.
1. Has anyone else used the service?
It’s always safest to deal with sites that other people trust and recommend, so look to see if anyone else has used their service by checking the following:
- Do they any reviews outside of their website? E.g Trust Pilot, Google Reviews, Facebook Reviews.
- Do they have active Facebook/Twitter accounts? Do people engage with their content?
- If you Google search ‘[company name] Scam’, do you find anything negative? if you don’t find anything at all, this is suspicious too.
Remember that reviews published on the company’s website can be easily fabricated, so make sure you find independent reviews. Trust Pilot and Google are the best places to check.
2. Are they a registered business and a registered financial services provider?
For New Zealand based companies:
- Can you find their business on the NZ business registry?: https://companies-register.companiesoffice.govt.nz/
- Does the NZ business register link back to the website that is claiming to be for that company? Remember that even if the business is listed on the NZ business registry, you could be looking at a fake site, pretending to be that business. Anyone can also register a business too, so this factor is not something you can solely base your research off.
- Are they a registered financial services provider in NZ?: https://fsp-register.companiesoffice.govt.nz/
Any business dealing with money or crypto in New Zealand must be on this list due to regulatory obligations.
For Australian companies:
- Can you find their ABN and ACN on ABN lookup: https://abr.business.gov.au/
- Check documents for the business on: https://connectonline.asic.gov.au/RegistrySearch - this can assist you in finding if they have an Australian Financial Services license (if applicable)
For international companies:
- Find out where the company is registered by checking their T&Cs or website footer. If they are located outside of the US/UK/Australia proceed with caution – just imagine how difficult it might be for you to pursue a legal case against a company in Bulgaria.
- Find the financial service provider register for the country that the company is based in and do a search to see if they appear. For example if the website says they are based in the UK, you can search the UK Financial Services Register here. For Bulgaria, the Financial Supervision Commission has a list you can search here.
3. Is there an international warning about the business?
- Are they listed on the International Investor Protection Blacklist?: https://www.iosco.org/investor_protection/?subsection=investor_alerts_portal
You can easily search the name of their company in the top right-hand corner search bar. Remember though, just because they don’t list here doesn’t mean they are safe.
4. Do they have any celebrity endorsements?
- Have they been endorsed by celebrities or on the morning breakfast shows or something similar? If so, there is an extremely high chance they are a scam.
These “endorsements” aren’t real, someone has simply taken a photo (or video) of this celebrity or TV show host and doctored it to make it look like they are endorsing that product.
5. Who owns the website and is it based in the country that they claim to operate from?
- You can use WhoIs.com to find out the location of the people who own the domain. You can find it here: https://www.whois.com/whois/
This is a very important factor you need to consider. Here is me tracking down the geolocation of the scam company ‘Coinfamily.co.nz’:
As you can see, the domain was created in India, indicating that coinfamily.co.nz is probably a scam.
6. Do they have a trust mark or accreditation seal on their website?
If so, ignore it. Any website creator can easily publish any sort of approval stamp on their website, making them appear to be legit. These are, however, meaningless in your mission of identifying if a Bitcoin website is a scam.
Hey look the president of the United States of America just approved of our help site!
Just kidding, I put that there myself, just like how any scammer would be enticed to do if there were trying to trick people into thinking their Bitcoin website is legit.
If you run into any sketchy websites, feel free to let the search engine gurus know of your sweet find:
If you think you are in a situation at all where you are being scammed, please use our multichoice quiz to find out more.
And if you’ve run through the list above and you’re still not sure, feel free to contact us here so we can take a look at it ourselves.