Woz was scammed out of Bitcoins now worth over $70,000

His bad luck proves banks are right to ban buying bitcoin with credit cards.

Apple co-founder Steve Wozniak has demonstrated the issue of bitcoin fraud by falling victim to an old school internet scam. Speaking at The Economic Times of India's global business summit this week, he said that someone bought seven bitcoins from him using a credit card, but canceled the card after the bitcoin was transferred, so the payment failed to process. And of course the card was stolen, so there was no way to retrieve his lost assets. He bought when the cryptocurrency was priced at $700, but the loss would be worth the equivalent of $71,400 today.

"The blockchain identifies who has bitcoins ... that doesn't mean there can't be fraud, though," he said, highlighting the issue that banks in both the US and UK have been focusing on in recent times. Earlier this month Lloyds Banking Group, like several others, banned its customers from buying bitcoin with credit cards, in a bid to offer some protection in a landscape that remains largely ungoverned.

Governments are becoming more mindful of the issues involved with bitcoin fraud, though. South Korea, for example, has limited cryptocurrency trading to real-name bank accounts, while UK Prime Minister Teresa May said the government is taking fraud in cryptocurrencies "very seriously". However, many would argue that meaningful action is not being taken quickly enough -- if tech legend Steve Wozniak can fall prey to this kind of fraud, anyone can.