Cryptocurrency scam is growing every day as the market continues to gain the public interest. And it’s sad to know that the situation is currently untamable; digital currency market is completely anonymous. Hence, every investor is charged to be aware of how to detect and avoid cryptocurrency scam. You must be quick to detect a cryptocurrency scam; it’s futile to find out when your transaction is completed. Yes, there is no cryptocurrency bank manager to write, no door to knock, and no way to ask for it back. Some people would use Escrow which involves a third party; that calls off the deal if it’s a scam.
To help protect investors, some groups have published a list of cryptocurrency scams, which is regularly updated to guide both new and old investors. The list has more of platforms asking for donations or some sort of commitments for cloud mining. Here are some tips on how to detect a cryptocurrency scam without losing your precious token.
When it goes pyramid and Ponzi
Pyramid and Ponzi ideology usually sound realistic but the truth is, infinity is an illusion when it comes to money. There are thousands of websites asking for your cryptocurrency donation for a double of it or some percentage within a period of time. That is a scam! Some want to call it multi-level marketing (MLM), where you have to refer someone to earn a certain amount of token. The offer is usually very interesting and the investors are hyped to have a happy ending. It does not work! Keep your hard earned token. A popularly known OneCoin in India ripped investors about $350 million worth of cryptocurrency before the representatives were nabbed. Investors lost a lot of money in the form of cryptocurrency.
Fake Initial Coin Offering
Till today, scammers are still using fake ICOs to separate investors from their cryptocurrencies. Indeed, ICO ideology has proven a lot of good in our business environment as it allows companies to raise capital for unique ideas. But be aware that scammers have hijacked the idea; creating fake ICOs, sometimes in resemblance with an existing ICO to mislead investors. You should scrutinize any ICO of your interest really hard before making donations; they are all potential routes for cryptocurrency scam. To avoid scam, it’s imperative to learn so much about the company before making any investment.
There’s something fishy when you get deals from cryptocurrency representatives through their social media accounts. Impersonation is real! Many scammers pose as representatives or team members in various organizations by creating accounts looking similar to those of the true representatives, especially cryptocurrency-related deals to scam investors. Do not strike deals through social media accounts, enquires may be enough. The imposters may offer a discount for cryptocurrency purchases or ask individuals to invest in the company projects. Please beware of such situations.
Mining is the only means to earn cryptocurrency without purchasing or exchanging it and the process involves a lot of digital energy. However, some companies with the abilities to mine could offer individuals a space on their server for mining (cloud mining), but the contracts are usually huge. Nowadays, a lot of people are using the opportunity to steal by posing as a company that can offer you a mining space. Some would offer to sell devices (which will never arrive after purchase) as a means to have your coin. You would be dealing with scammers if physical agreements and are not involved.