Protect Your Business From 3 Common Bitcoin Email Scams

In the digital age, bitcoin is a well-known term – but that doesn’t mean it’s well understood. What is cryptocurrency? According to Cointelegraph, “cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.” It is decentralized and relies on an open source verification system. In essence, it’s worth fluctuates and it is virtually untraceable. The most widely used and recognized cryptocurrency is bitcoin. So, what does this have to do with your business?

Protecting your money from scammers is an eternal struggle, much like the yin and yang, which means your employees must continue to adapt as scams evolve. Scammers are a permanent fixture in our society and only getting more sophisticated. Although more demands are in the form of bitcoin, the idea remains the same: posing as something legitimate to get your information and money quickly before disappearing.

According to the FBI, scammers have most recently used the public’s anxiety over the pandemic to their advantage, and email scams have been on the rise. Here are the three most common bitcoin email scams to look out for.

Read Society’s ‘2020 Cyber Claims Digest’ for more insight on cyberattacks and costs associated with cyber claims.

1. Investment Requests

Cryptocurrency conjures many misconceptions, including inflated return expectations, mainly due to its 2017 peak and stories about investors getting rich overnight. Enter the exit scheme, one of the most common bitcoin email scams. According to Cointelegraph, an exit scheme is “a fraudulent scheme wherein the organizers of an initial coin offering (ICO) or a similar fundraising avenue disappear with their investors’ funds after acquiring a sizeable sum of money.” Numerous operations, most notably Plustoken, have used this devious method, building empires off stolen investments before finally being shut down.

Other cryptocurrency schemes involve fake currencies, in which a new type of currency is introduced, boasting appealing returns on investment. Look out for crypto Ponzi schemes as well.

Protect your business: The best weapon against this type of scam is research. Look for any eyebrow raisers like returns that seem too good to be true or an out of place urgency to commit. If you’re not seeing much information on the company or research to back their promises, ask for it. A legitimate investment company won’t feel threatened by common investor questions.

2. Charity Donation Requests

Posing as a charity or employer is certainly not a new method of deception, but it is embedded in modern bitcoin email scams. According to the FBI, “Scammers, posing as employers, may ask you to accept a ‘donation’ of funds into your own bank account and to deposit them into a crypto kiosk. The so-called ‘donation’ is likely money stolen from others.” By following the scammer’s order, you make yourself complicit in illegal money activity making you a mule.

Other more direct scams involve posing as a charity to get you to donate. It’s simple, but all it takes is one unsuspecting victim who, out of good nature, gives money away to a deceptive operation.

Protect your business: Use your best judgment and common sense when it comes to determining a suspicious email. If a specific request like transferring funds is odd given your workplace culture, make sure to remind your employees to be aware of these suspicious messages. Make sure your work emails are filtered as best as they can be. If your company works with charities, make sure your employees know which ones they are and to look out for traps posed as legitimate affiliates.

3. Blackmail

Blackmail is a scam as old as time. A frightening message threatening to expose embarrassing, illegal or unethical behavior is sure to make someone panic, even if nothing was done wrong in the first place. Whether the demanded payment is in credit card information or cryptocurrency, this bitcoin email scam expects victims to pay up out of fear of exposure or threats.

Protect your business: While the first layer of protection should be general cybersecurity to weed out phishing emails, your business’ overall best defense here is maintaining an awareness of such scams. Potential victims end up paying out of fear. They don’t think rationally when being threatened and sometimes only see the red flags with 20/20 hindsight. Make sure your employees are on guard. Have an open-door policy about suspicious emails, and if you find one, do not hesitate to contact the FBI.

Bitcoin email scams will continue to exist and adapt but maintaining your employees’ awareness of such ploys is the best way to avoid falling victim.

Cyber Liability Insurance for Businesses

Preventive Resources

When it comes to risk management, prevention is the key. Society Insurance policyholders gain the collaborative and consultative partnership of risk control experts and access to exclusive safety resources designed to keep your workplace safe and profitable.

Contact your local Society agent to learn more or check out our Cyber Blog Series for more tips on how to protect your business and personal information when online.

Additional Cyber Security Resources

●     Homeland Security Newswire 



As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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