Cryptocurrency market capitalization is $250 billion dollars at the time of writing. A lot of money is flowing cryptocurrency market daily.
As you know the crypto market is growing day by day, it’s all started back in 2008 when Bitcoin became the first cryptocurrency, from that point now daily cryptocurrency market had lot’s of transactions, new currencies or token created, new exchanges are started.
Yes, Cryptocurrencies are secure but the human brain is not, scamming newbies is an easy task in the crypto field, but there no firewall, encryptions used by our brain, just a stupidity and blind trust is costing you.
Let’s look at some Popular cryptocurrency scams, after reading this post you know about these scams and stay away from those and have a presence of mind to invest in crypto.
Let’s start with basic scams.
Fake Balance Scams.
It is a basic scam and a very tricky one this scam is mainly run on Facebook groups and Reddit communities and also run by an individual.
What happens here is if you are target victim a person contacts you and shows his crypto wallet balance and transactions which is in huge numbers, and person interact with you about how he makes these huge crypto transactions and then he offers some fee to teach you to earn crypto.
If you believe blindly to his wallet numbers then you are about to lose a lot of money because that number may be fake numbers.
You find out anybody in social media saying that give me some money and I make you rich in one day, stay away from them.
What happened in this trick is they simply import any high balance wallet address to their wallets and that shows only a balance and transactions made fro that imported address you cannot able to withdraw any balance from that account.
If you buy any wallet and find out imported address then you should demand private key of that address, but now scammers are selling wallets with a private key difference is these wallets with a private key they are Ethereum Token wallets.
The best way is to stay away from this scam is don’t buy a wallet from sellers and if you buying then demand private key of wallet.
This type of imported address wallets is also sold in Dark markets.
Pump and Dump Schemes.
Most of these type of scam run in Telegram channels, these channels manly target tokens and particularly those tokens with a negligible amount or low amount, next channel admin say to place a buying order of that token in particular time to raise the price of a token.
These type of channels have multiple layers like paid channels and free channels, their first preference is paid channel members and paid members to work together in price manipulation, for example, paid group to decide to buy a token at today 6:59 pm and paid group inform free group that this token price is going up by 7:00 pm here is a huge profit for a paid group, after a month or two month paid group show free group the proof of pump saying we did this pump month ago and also doing today.
But pumping and dumping are not that easy in Bitcoin or any other top cryptocurrencies, in top cryptocurrencies wales trying to manipulate the price but here they don’t make a huge impact on price.
Fake Twitter Giveaways.
Here scammers create a fake account of any known celebrity in crypto and conduct giveaways for a small amount, for example, scammer create a fake account and earn enough of followers to get verified on Twitter after getting verification they change their name to Vitalik Buterin and they go to original Vitalik Buterin page and add further tweet on recent post about giveaway, obviously every one think that Vitalik Buterin conducting giveaway and let’s go participate in it.
This scam is creating too much frustration for the original person and also made an impact on their image.
Fun fact is after seeing this type of scam official Vitalik Buterin twitter page change name into Vitalik-Non giver of Ether and many more official people change their name.
Make a sure the username of the person is correct or not to participate in Twitter giveaways.
Here scammers launch fake coin to collect money. In 2017, a Mumbai-based company called OneCoin was delivering a sales pitch to a room of investors. Indian financial enforcement officers raided the meeting, ultimately jailing 18 OneCoin representatives for operating a cryptocurrency Ponzi scheme. At the time of their arrest, OneCoin had already moved over $350 million through a payment processor.
Above event is a small example of Ponzi schemes, and especially do not trust those schemes telling your money is going to double in a month.
A lot of people lost a lot of money. And we like to think we’re clever enough to spot a scam when it in front of us. But cryptocurrency is creating new scams.
In crypto world, ICO means Initial Coin Offering just like in Stock market it is called an Initial Public Offering, same rules are applied here.
Making a coin or token is not a big deal, but it is hyped as making coin is like making a miracle, any coder having a basic java knowledge can create a coin and launch own ICO, in tokens even a person not having any coding background can simply create a contract in blockchain and launch ICO.
A couple of months ago these kinds of ICO’s are promoting throw Google, Facebook advertisements and Twitter adds, so Google, Facebook, Twitter banned ICO adds from their platform.
Also, ICO spreading throw social media influencers like Bloggers Youtubers, here ICO companies contact popular social media influencers and offer them a high referral fee to tell the public to invest in their ICO, best example for this is Bitconnect.
Genuine companies are offering in name of Projects, not in the name of ICO because here the purpose of launching is mattered most, and then a flow of coin, this is how real ICO’s are launched.
Before investing any ICO’s you should check out their purpose of raising fund, how their coin moves into the market and who is getting benefits from ICO.
Coin Doesn’t Exist.
Fake digital currencies are also is sold, for example, In August 2017, the City of London Police shut down a “cryptocurrency business” that was cold-calling people to sell fake digital currency. Victims were cold-called and persuaded to purchase non-existent cryptocurrencies. Nine victims came forward to the U.K. firm, Action Fraud, with combined losses exceeding £150,000.
The man who allegedly set up the scam used a central London address, in the financial center, to lend the scam authenticity.
If you receive a call asking for your investment in a project, note the name of the caller, the company name, and address, and put the phone down.
The key to staying safe in cryptocurrency is research. There are always unfortunate individuals who get quick money and will fall victim to fraud. Things that seem too good to be true probably are. Some cryptocurrency day traders do make vast amounts of money — but they know what they’re doing. And many of them have trading, buying, and selling Bitcoin and other altcoins since the very early days of cryptocurrency.