Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment and you should not expect to be protected if something goes wrong.
The Bitcoin Mining Scam is a new online threat coming at us. Our compliance expert explains another sophisticated scam to look out for.
The Bitcoin Mining Scam is a new online threat coming at us. Compliance expert Lukas Jackson (name changed for privacy reasons) explains another sophisticated scam to look out for.
In the world of cryptocurrency, scams are unfortunately all too common. Recently, I received a suspicious email claiming I had earned a substantial amount of Bitcoin through cloud mining – but I don’t have any cloud mining accounts.
In this article, I’ll walk you through the steps I took to analyse this scam and expose the methods the fraudsters used to lure people in.
The first red flag was the email I received, which claimed I had a balance of 1.3426 BTC (worth over $890,000!). The email was from a random address, and the message suggested that I had somehow made this money through automatic Bitcoin mining.
The email encouraged me to "continue" and access my balance, but it already sounds too good to be true for four reasons:
1.3426 BTC is worth $138,023.90 AUD at the time of writing (28 Oct 2024).
I don’t have a cloud mining account.
The email address it was sent to was involved in a data breach with a crypto tax software service, so we know the scam is targeted.
The email was marked as spam.
Ignoring that the email was marked as spam, the email did provide a suspicious link, suggesting that I visit a website to claim my earnings. However, the link was routed through Google Translate to disguise its true nature, likely to bypass email filters. Fortunately, Google Translate blocked the page and wouldn’t load it.
I managed to access the suspicious link and upon entering the site, I was shown a dashboard that mimicked legitimate cloud mining platforms. According to this dashboard, I had earned $91,103.47 USD from 1.3426 BTC of mining profits, which is a huge sum for doing absolutely nothing - but it also was different to the $890,000 the email originally claimed I had.
Of course, no legitimate company would allow someone to mine thousands of dollars' worth of Bitcoin passively without any verification or prior knowledge.
As I continued exploring the site, another page appeared, telling me that my account would be deleted if I didn’t act immediately. Scammers frequently use urgency to pressure victims into making hasty decisions.
This is a classic tactic to lower your guard and push you to make quick decisions, hoping you’ll act without thinking critically.
Another key element on the site was a series of fake notifications that popped up, claiming users were receiving payments. One notification read, “Emily M. received a payment of $3,419.51,” while another mentioned someone else receiving $2,986.22.
This is a tactic designed to create a sense of legitimacy and urgency, giving the impression that real users are cashing out large amounts of money.
The site also had user testimonials from "satisfied customers" claiming they were earning thousands of dollars. Reviews from "Sarah B." and "Adam R." spoke glowingly about how this service had boosted their Bitcoin holdings.
The glowing reviews are fabricated, designed to build trust in the victim and convince them that the service is credible.
The scam site even had a section where it claimed I had earned significant amounts of money from Bitcoin mining over several months. Each month, there were transactions listed that supposedly added to my balance.
Of course, all of this is fake. There is no real account, and these numbers are designed purely to entice users to make a withdrawal attempt, at which point they would be asked for payment or personal information.
At the final stage, the site displayed my supposed profits, totaling thousands of dollars. It invited me to "collect my bonuses" and withdraw funds.
However, when trying to withdraw, victims are asked for personal details and to make a payment to “unlock” their “funds”. None of this is real, none of the money is real. The website is a total fake.
This step-by-step guide demonstrates the extreme and convincing lengths scammers will go to create elaborate traps. From fake balances to fake chat support, and even redirection to payment platforms, these scams are highly sophisticated and convincing.
Remember to always be sceptical of unsolicited emails, or people inviting you to investment opportunities – especially those offering huge sums of money for little to no effort. Never enter personal information on suspicious websites, and be particularly cautious with cryptocurrency-related schemes. If you’re not sure, ask a friend or family member, or ask us.
Stay safe, stay informed, and protect yourself from the growing number of scams in the online world.
Lukas Jackson (named changed due to bad actors) is a leading expert in compliance with over 5 years of experience in crypto, AML/CTF regulations and scams prevention. Actively involved in initiatives focused on scam prevention and public education, Lukas has a passion for protecting individuals from online threats.
With a focus on raising awareness and developing strategies to combat scams, Lukas is committed to driving efforts that help people recognise and avoid scams.
Be wary of crypto scams that promise guaranteed returns or high returns with little to no risk. These often turn out to be Ponzi schemes or fake initial coin offerings (ICOs) or similar.
Never share sensitive information like private keys to your digital wallets with anyone, and be suspicious of unsolicited offers or giveaway scams. Do your research on any crypto exchange or crypto asset investment opportunity, and remember that celebrity endorsements can be misleading.
Legitimate businesses will never pressure you for personal data or promise unrealistic profits. Always be cautious when dealing with fungible tokens and online investment platforms.
Cryptoassets traded on CoinJar UK Limited are largely unregulated in the UK, and you are unable to access the Financial Service Compensation Scheme or the Financial Ombudsman Service. We use third party banking, safekeeping and payment providers, and the failure of any of these providers could also lead to a loss of your assets. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. Capital Gains Tax may be payable on profits. CoinJar’s digital currency exchange services are operated in the UK by CoinJar UK Limited (company number 8905988), registered by the Financial Conduct Authority as a Cryptoasset Exchange Provider and Custodian Wallet Provider in the United Kingdom under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended (Firm Reference No. 928767).
Apple Pay and Apple Watch are trademarks of Apple Inc. Google Pay is a trademark of Google LLC.
This site is protected by reCAPTCHA and the and apply.