Crypto-Currency Scams

By now, Cryptocurrency have become a global phenomenon although it is still not understood by most people.

Governments, banks and companies are aware of its importance, in fact, in 2016 most major banks, governments and accounting firms have published papers about cryptocurrency and even some started a so called blockchain project.

Although cryptocurrency got such a huge coverage in the media, still people fail to understand this currency even the basic concepts which makes them exposed to Crypto Scams.

As time progresses so does the scammers, since the global interest in Crypto-currency and digital coins there is an increase in reported fraud activity related as well, to Crypto-currency.Considering this filed is still new, the interest and amount of media coverage have lured many people to ‘jump in’ and get a piece of the pie, exposing them to scammers. In the past 6 months many authorities have issued a public warning against Crypto-Currency fraud, and Facebook and Google have been band from allowing advertisement adds for Crypto-Currency, ICO, Binary Options, Forex and CFD trading in the claim that most of those fields have remained unregulated and there is no way to tell what’s a trust worthy platform from a scam operation.

5 Most Common Crypto-Currency Scams

ICO fraud/scam

ICO’s work just like a “head Starter” campaign, investors can invest in a small coin AKA Alt-Coins to help it gain value and become a substantial token/ coin.

All and all a legitimate way to invest in a company/ product, betting on the future of that product/ company. A real ICO will have a profile, a site and a founder, keep a close eye and a healthy dos of skepticism if you are looking to invest in ICO’s, look for clear communication (available support team, that the numbers on the site are available etc.), realistic product expectations (the product predictions are not exaggerated, notice deals that are ‘too good to be true’ ) and shady profiles.

When investing in ICO’s, if there is a doubt, take a step back, don’t be timid to ask ‘hard’ questions like ‘what your yearly forecast is? What this product/coin is for? What needs it will answer?” a dignified ICO will have this information available for their investors.

Exchange Scam

Many platforms offer to allow investors trade with their Bitcoin or trade on Bitcoin against other currencies such as the US Dollar, on a Forex model platform, whether they have a very strict withdrawal policy or they would ask you to deposit your BTC in their platform to never allow you to take them out, these exchanges seem to open in large amounts like mushrooms after the first rain. Many ex-Binary Option companies have moved their business to these types of exchanges, which should indicate the nature of thus exchanges. Some exchanges are legitimate, but just like the case in KuCoin; their domain was duplicated and many of their investors were redirected to use the scam platform, all the investors lost everything they sent to what they thought to be their regular exchange. When investing with an exchange make sure – clear communication (again, it’s very important to know you have someone to ask and consult with) and working phone numbers and lines, advise is given by professionals only! Don’t be shay to ask if your consultant studied finance and where, dos he have a license? what are the withdrawal policy? are you getting clear information? (it’s very easy to get confused when your account manager is talking in ‘technical terms’ but can he explain it in simple words and it will still sound logical?) At the end of a trading day – is it possible to withdrawal your BTC to an offline wallet? There are no stupid questions when looking for a legitimate exchange.

Payment fraud

 Like the case with Bitconnect; some platforms will allow you to take a loan to ‘borrow’ a Crypto-Coin for a set profit and other bonuses, Clients then are asked to purchase BCC tokens to keep the participance, naturally that got the token to increase in price. Reminding us the High Yield pyramid scam, where that only the first investors profit while all the others payed the price for that taken payout. In conclusion, the best way to invest and get in the Crypto-Currency world is to educate yourself and buy small amounts of coins from quality exchange. If something smells fishy, or if you are not sure if you’re in good hands; let it go. Better to take your time and feel confident of what you know then to fall a victim to another scam.

Impersonation Fraud

Decentralized money is meant to be personal, therefore many scammers impersonate to high profile investors, offering to work with your wallet to help increase the account for a fixed percentage, asking for the wallet address and user details. In result ether they hold the account as a captive, blackmailing the account owner to get funds out or to allow access to the account or just plainly steal the account whole leaving nothing behind to try and track them down. Never ever provide your wallet address/ key address to anyone! Your privet Key and wallet address is to remain privet. If you are approached by a ‘professional trader/investor” on social media such as Facebook/ Twitter/ Instagram/ What’s Up etc. close, block- do not respond back, remember one thing; a real investor/ trader/ broker will not start ‘fishing’ for client’s, if an investor is that high profiled you should be able to find information about him online, and no respectful brokerage or investment house will contact client’s through social media.

Fake Free Promotion 

Fake giveaway’s go’s hand in hand with the last criteria, impersonators will use promotions like free bonus, free counseling, free tokens/ coins to attract the client’s, everyone loves a free product, but make sure one free promotion will not come at a heavy cost; if you been lured by a promotion like this and get to a page asking you to make a deposit/ investment/ account activation first- do not continue, probably that deposit will be gone before you know it never to be returned.

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