Scam in cryptocurrency. How not to be deceived

Cryptocurrency scams. How not to be cheated

Due to the fact that the cryptocurrency is built on blockchain technologies – cryptocurrency exchange, transactions between users are absolutely anonymous. Therefore, cryptocurrency is a favorable environment for scammers. Scam is carried out in different ways. Today we will analyze how scammers operate and how not to lose money on fraud.

Types of scams and scam schemes

There are various methods and schemes of scam projects. Among them, several typical ones can be distinguished.

Fraudulent Sites

They represent various Internet projects in which it is necessary to invest funds and in the end promise a good profit. As a rule, there is little information about the project itself, the developer, technical documentation and the team. The emphasis is on profit. Phishing sites of popular and well-established projects are often found in this category. After replenishment of the account, the money disappears or a virtual account is opened without the possibility of further withdrawal of funds.

Financial pyramids

It implies investing in the project at the initial stage and receiving high profits in the future. The advertisement describes that money is invested in the development or development of new technologies, strategies in the financial markets, the creation of unique platforms that make it possible to bring super profits. In most cases, this is a financial pyramid, and after collecting funds from investors, the project is closed.

At an early stage, payments are made and a referral program is running, which allows you to attract more users. Financial pyramids of this kind have rather high interest rates compared to opening an investment account on popular cryptocurrency exchanges. One of the most striking examples is OneCoin, which caused damage to depositors in the amount of 4 billion. dollars.

Shitcoins

These are coins that are of no particular value or are comic. This term is slang and is used for low-ranking crypto coins. Among them there are quite promising ones that have not yet gained popularity. But in most cases, these are fraudulent projects. Attract investors through aggressive marketing. Thanks to this, inexperienced people invest in dead coins with the hope of getting rich quickly. The “Pump and Dump” strategy is also used. This is when the price of a coin is artificially inflated, and after the creators raise funds, the coin scams.

Fraudulent ICOs

Initially, the procedure was created to attract investment in various projects and start-ups. Digital shares (tokens) are issued for cryptocurrency projects. After entering the exchange, they can be exchanged for money with the prospect of a higher price. Fraudulent ICOs collect money by giving dummy tokens in return. Subsequently, the project is closed without realizing further plans. In most cases, this is done on purpose. The main influx of investors is carried out by airdrop advertising.

Spam

Fake representatives of “successful companies” write to e-mail or instant messengers and offer to invest in any coin or project. In this case, the proposed options are almost always a scam.

How to protect yourself from scam

It is impossible to completely protect yourself from unsuccessful investments, but you can minimize the risks using the following recommendations.

Assess the idea of the project and its relevance.
Get to know the founders and the project team. To do this, it is better to use separate independent resources. Study biographies, previous projects of team members.
The presence of a roadmap and technical documentation adds reliability.
Compare profitability compared to other similar projects.
Check the performance of consultants and the competence of specialists’ answers to questions related to the work of the project.

If you do not want to be deceived, do not neglect these rules.

How scammers make money

After the release of a beautiful “package” and the launch of advertising, investors are invited to deposit a certain amount of funds in fiat money or cryptocurrency. For the purpose of motivation, various tariff packages or bonuses are offered in order to get more. After receiving the funds, investors receive tokens or a fake account where you can see how the profit is accrued. Some projects allow you to withdraw earned funds at the initial stage. This reinforces the trust from the audience and attracts more participants. Having collected a certain amount, the project is closed, and the money invested disappears. In the case of buying tokens, they remain on the balance sheet, but they cannot be converted to other currencies.

Conclusion

You can earn in cryptocurrency without scam projects, you should not trust loud statements and sky-high profits. From the article, you learned that deception is hidden behind beautiful packaging. And in order not to fall for this “packaging” you need to conduct an in-depth analysis, it will not let you lie.

Be vigilant when working with cryptocurrency, there is a huge amount of deception, but there are many more good projects. Invest only in truthful projects and do not believe everyone in a row. Good luck with your investment!

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