Bitcoin scam alert as fraudsters swoop on crypto-currency’s record-breaking success | Personal Finance | Finance

An expert has issued a scam warning after bitcoin hit a record high, before dropping off shortly after.

Bitcoin hit an all time high yesterday with the value reaching over £56,000 but Zigmas Pekarskas, chief executive of Smart Betting Guide (SBG), has warned investors to be wary of scams involving the cryptocurrency.

According to new analysis from SBG £209,190,929 worth of bitcoin was stolen last year through exploits and exit scams.

The most common scamming tactic used was an access control exploit, constituting 46 percent of the total bitcoin funds stolen.

The spike in bitcoin’s value came after the Securities and Exchange Commission allowed 11 companies to start exchange-traded funds based on the cryptocurrency.

These funds allow cryptocurrency through brokerage accounts without needing to engage with the digital tokens themselves.

These investments are still vulnerable to pump and dump schemes, which artificially inflate the value of cryptocurrencies before pulling the rug out from under the coin and crashing their values.

A total of £1.3 billion worth of cryptocurrency was stolen by scammers last year.

Pekarsas said: “As cryptocurrency continues to grow in popularity among investors or experiences a surge in value like bitcoin did this week, so does the appeal to scammers – especially among volatile blockchains or inexperienced users. 

“First-time investors are particularly vulnerable right now as they may have rushed to invest in bitcoin amid the soaring price without considering the security implications. It’s essential that both long-term and new investors prioritise securing their funds sooner rather than later to avoid the surge in scams that are likely to follow. 

“Do not share your personal information with anyone unless you are 100 percent sure the request is safe – especially if you’ve been randomly contacted over text or email. If you know a cryptocurrency is particularly volatile or is experiencing a surge in interest, exercise caution before accepting investment support.

“Ensure that you are aware of how cryptocurrencies and blockchains work so that you can identify any discrepancies that may allude to ulterior motives. Make sure you only trade via reputable exchanges and always use a secure eWallet to hold funds.”