With the Bitcoin price crossing MYR 30,000, Bitcoin trading volumes in Malaysia have reached an all time high. Along with the mainstream popularity of Bitcoin, there have also been a huge rise in the number of Bitcoin scams in Malaysia.

Bitcoin is attractive to scammers for the same reason it’s attractive to you: it’s fast, it’s international, and it’s irreversible. So as Bitcoin usage has grown, we have seen more and more Bitcoin scammers disappear with user funds.

The following are some of the most persistent Bitcoin scams.

Bitcoin Ponzi, High Yield Investment Program(HYIP) or Multi-Level Marketing(MLM) Schemes

These schemes attract people with low or no subscription fees and promises of sky-high returns on their deposits. They often rely on existing investors signing up new ones, which is the only source of revenue or growth. As with all Ponzi schemes, early investors get paid with the money from later investors.
Inevitably when new investors stop signing up and depositing, the scheme collapses, since no more funds can be paid out.

What to look out for

These are some of the warning signs that you might be dealing with an illegal scheme:

  • Promises of very high returns/interest
  • Guarantees that you “can’t lose money”
  • Little verifiable information on company and owners
  • Difficulties in withdrawing your funds
  • Social signup links with high bonuses
  • Sense of urgency to “invest now”

Bitcoin phishing scams

Phishing scams are common in the online world. This is when a scammer creates emails, messages, login pages and/or websites that resemble a legitimate company. Once users enter their information (like login username and password) on the fake website, the scammers have access to the users’ accounts. If it is an account where Bitcoin is stored, the scammers can easily make off with the money.

Where users have the same password used on multiple sites, the scammers can often gain access to other sites with more sensitive information.

Google Adwords Phishing Scams: When you do a search in a search engine like Google for any given topic, you’ll often see results that include a mix of paid advertising and organic search results. Often scammers publish ads that look similar to Luno and sometimes would also create identical login pages to try and get your username and password.

We recently noticed an AdWords scam, targeting us and our customers. When you search for “luno” the following advert shows:

How to prevent phishing scams

  • Don’t click on suspicious emails
  • Ensure the correct spelling of the website address
  • Use a unique, strong password for every website account
  • Use a reputable password management tool
  • Enable two-factor authentication on sites that support it
  • Report suspicious emails to your email provider (as phishing)
  • Report suspicious websites to the respective web hosting company

Bitcoin mining scams

Bitcoin is generated through the process of mining, which confirms Bitcoin transactions on the Blockchain. Mining requires great amounts of energy, expensive equipment and upfront capital. Bitcoin mining investments emerged out of this need, whereby many users can invest in a mining scheme and get a percentage of future mining proceeds.

There are some legitimate Bitcoin mining schemes, but there are far more mining scams than legitimate outfits. Since it is difficult for most investors to confirm if a mining scheme actually owns mining gear (or does any mining at all), there are many websites that claim to mine but simply take investor funds, pay high returns for a while to build trust and then simply disappear.

Avoiding mining scams

These are some of the things to be on the lookout for:

  • Inability to see or verify the proof of ownership of any mining equipment
  • Inability to see or verify their public mining address and ownership
  • New website (look it up with archive.org)
  • High referral commissions
  • Guaranteed profits

Bitcoin wallet and exchange scams

There are some websites claiming to be wallets meant to store Bitcoin. Others claim to be exchanges, where one can trade Bitcoin. Others yet claim to do both, but many of these are in fact scam sites.

They simply get users to sign up and deposit Bitcoin or local currency for a while to build trust and then after a while make off with the money.

Things to be on the lookout for:

  • Only deal with reputable, registered companies
  • Make sure you can verify the identity of the employees/owners
  • See if they are mentioned in reputable local or international news publications
  • Treat anonymous and new exchanges, apps and browser extensions with caution

List of known Bitcoin scams

Since it is very easy to set up a scam website, it is impossible to always have an up to date list of scams. A few common ones we have seen in Malaysia include MMMGlobal, Ethtrade, UFunClub and Microhash. However, since new scams pop up every month, you should do your own research and investigation (Google and Reddit can take you far). And remember: if something sounds too good to be true, it probably is – assured high returns of 90% every month is probably something that would be a scam.

However, here are some sites that research/comment on scams:

  • http://www.badbitcoin.org/thebadlist/
  • http://bitcoinscammer.com/
  • https://bitcointalk.org/index.php?topic=1326821.0
  • http://behindmlm.com/

To avoid encountering unwarranted risks, understanding the operation of scam websites is a priority. This may require investors to have a solid foundation of knowledge and years of experience in the market. However, there’s a tip to simplify this process, which is to participate in trading platforms recommended and guided by Crypto Pie – a group of highly skilled investors. These platforms are often recognized and trusted by the investor community.

This article is contributed by Mriganka Pattnaik. He is the Countries Lead- Southeast Asia, for Luno, Asia and Africa’s largest Bitcoin exchange and operates out of Singapore. Mriganka has worked on Bitcoin markets in Singapore, Malaysia, Nigeria and India. He had previously worked for Bank of America in Mumbai in the Global Investment Banking Division. He has also co-founded a start-up in the medical technology space.

    21 replies to "Bitcoin Scams in Malaysia"

    • Zaini

      hotcoin.cash is scam or not?

    • James Roland

      If you had lost money to crytocurrency, you can be able to recover you funds with the agency that helped me. Message me on whatsapp so i can assist. +447862107279


      I have talking to 2 ladies telling me to buy usdt and then they will pay me principle plus 10% commission then after that I transfer the usdt .may this be a scam?

    • jacques

      I was denied a withdrawal from my account on binance2.vip / bi-nuances.com they say I made too many withdrawals and froze my account but demand 2000 $ or going to Singapore FX with passport and ID – very dubious

    • EricLeo

      Hi i am being SCAM by cryptocurrency SCAM in malaysia about USD15000, What i need to do? Is it make a police report

      • KCLau

        Yes. Make a police report.

      • James Roland

        You can message me through my email. I can refer you to someone

        • Leong

          How? is it another scam

    • Rb

      VRB Corporation or DIB Bank Based in 10th Flr. SHERATON Imperial hotel,KL Malaysia. How to Know if legal in malaysia because they used Fake name and fake CEO behind this is Mr. Ko Ting Chen,Mr. Jeff,Mr. Sam, Johnson and many more…

    • Darma

      Galaxy mining is that scam?

    • WEN
      • DinoWang

        Did you put your money there? If yes, please contact me via my email.

    • Ming

      coindirect.com is scammer ! becaful

    • Shah

      Scammers or not

      • KCLau

        We don’t know. If not sure, better not to risk your money.

    • Mohd Radzi Bin

      It estonia bitcoin scam?

      • chin

        i got to know from my buddy, the bitcoin using estonian address, the chairman not even can speak fluent english, he might be the puppet of the founder as their CM.. so be careful of all those scammies thingy

    • Azim

      TBC is scam or not

    • karan

      Thanks for sharing…
      Cryptocurrency is also known as Unicorn for the generation or you can simply call it future money. many Ganesh Dhananjay Godse negative reviews might be there but still, he was the man with all positive energy and dynamic personality. Now a day’s Ganesh Godse is in a better position.

    • Lucas Wong

      Is kitcoin scam? Thanks.


      Its Bitclub scam?

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