As the price and popularity of Bitcoin rises, first-time users are lining up to buy into this cryptocurrency. Scammers are aware of the platform's significant barriers to entry and have established Ponzi schemes to take advantage of naïve individuals.
In these schemes, scammers promise unrealistic returns on Bitcoin investments. To maintain the illusion that everything is going to plan, the cons pay off old investors with the money they receive from new investors. Users are under the impression that their money is being invested in Bitcoin; in reality, it's being siphoned off for other purposes.
The U.S. Commodities Future Trading Commission recently filed suit against a New York-based company that fraudulently solicited $600,000 from 80 different people who assumed they were making their first investments in Bitcoin.
If you're looking to get started using Bitcoin or other cryptocurrencies, be careful! The speculative market is full of potential scams.