Bitcoin frauds just keep on coming

The promoters of virtual currency Bitcoin are working hard to establish a foothold for the brand but are continually knocked back by scammers.

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While Bitcoin promoters claim the electronic money is held in secure online vaults, hardly a week seems to go by without consumers reporting fraudsters stealing their cash.

The latest alleged scam is

Bitcoin news aggregator CryptocoinsNews has slapped a ban on advertising by the Bitcoin Cloud Services after complaints from consumers.

Bitcoin Cloud Services is accused of running a Ponzi scheme for investors, which means current investors have their profits paid out of funds provided by new investors.

Sooner or later, the scheme collapses as the amount paid out exceeds the cash coming in.

Consumers complained that they had invested in Bitcoin Cloud Services in response to advertising, but had stopped receiving payments.

The site quotes an unnamed consumer who said: “Thought you’d like to know that this Bitcoin Cloud Services mining company is not paying out on contracts, not replying to emails and not answering the phones. Yet they are still taking new orders.”

CryptocoinsNews is urging consumers to avoid Bitcoin Cloud Services until the allegations that the site is a scam are cleared up.

The news site also flags another Bitcoin mining site as a suspected scam –

CryptocoinsNews points out that the site is offering over-the-market rates to buy Bitcoin, but the payment methods are reversible, such as wiring cash.

This means Bitcoin investors can believe they have a sale and money in the bank only to find the buyer has reversed the transaction and recalled the money, leaving them with the Bitcoin and their cash.

At this time, BTC Flap is listed as a possible scam while the Bitcoin community investigates further.

Bitcoin marketplace

A marketplace for buying and selling Bitcoin with tried and trusted sellers is Local Bitcoins.

This web site is like an eBay for virtual currency and rates buyers and sellers in a similar way to the popular general auction site. Payments are also protected and non-reversible.

“Bitcoin is a lot more legitimate than it once was, but the currency is plagued by probable scammers pledging to double your Bitcoins or buy them at above market rate,” said CryptoCurrencyNews.

“Many of these sites are likely scammers and Bitcoin consumers should use them at their peril.”

Recently, Bitcoin values have seen resurgence after a general malaise. The Bitcoin exchange rate (June 11, 2015) is £147.79/US$229.

Bitcoin is not regulated by any government agency or central bank, but by the community that uses the currency.

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