'I have nothing against rich brothers and sisters. Pray for 'em every day. But callousness and indifference, greed and avarice is something that's shot through all of us.'
-Cornel West (American philosopher, political activist, social critic and author)
In every revolution, there is both the good and the bad. There are those who will help and build the foundation then we have those who seek to abuse and try to hinder progress. As with every change in paradigm, we must not be led by the wayside to think of only ourselves but to give a hand of guidance and love to the weak and vulnerable.
So for today, we will decide to give you a post of what scams or frauds you can expect in this new shift away from the traditional financial institutions. This is to help you make the right decisions and not to experience deceptive means incurred to you in order to keep your money and mentality on solid ground.
Without any further ado, let's get into this post.
Ten Ways To Get Scammed Of Your Cryptocurrency
💂 Impersonators- These are usually on Twitter, Instagram, Facebook and often spam emails on Yahoo! Scammers create fake accounts impersonating popular individuals (using both profile picture and name). These scammers will promise to give away tokens or coins if you send them a certain amount of your cryptocurrency to a wallet address they provide. They comment on the targeted celebrity's tweet to lure inexperienced people into whatever they are doing. To egg one on, one will see other different accounts liking, sharing and commenting positively on the giveaway. Those are just bots that anyone can purchase on the internet to make people trust them. A good example of this scam is in the screenshot below.
By the way, it is very common for people to get scam this way especially those who are quite new to the space.
My advice: Do NOT send any of your cryptocurrencies to those accounts.
How do we identify the fake from the real account?
Well, you check whatever comes after the '@' in the profile name. If one character (albeit a letter, number or symbol) is missing or is not same as the one who is tweeting, then it is a fake account. For example, take a look at the screenshot below of Crypto99's poll tweet involving one of those suckers.
💂Pump and Dump Groups- These are where the insiders; those inner circle collaborators artificially pump the value of a particular coin (especially low daily volume cryptos) just before plummeting its value, leaving investors late to the game as the bagholders in its wake. Some groups are free to join, but often one have to pay in order to get those heads-up on what is about to moon. The leaders of the group will always make a profit because they are the ones who choose the coin to pump and at what price to dump it. Influenced by FOMO and ads about their group on the internet, more investors will buy in, pumping the price to astronomical levels as a result. This micro-bubble often ends when the group members sell off the coins or tokens with little to no warning. Group members profit who got out in time while late investors or those too slow to sell off lose their money. The End.
Oh, shut up!
If you want to see the frequency of these pump-and-dump groups, go to this link and have your mind blown.
My advice: Stick to groups that you do not have to pay to get signals from. Be a member of those that give good technical analysis and do posts that you can at least profit conservatively from. A good one is the aforementioned Crypto99's Telegram group. I personally made a few gains there even during bear market.
💂Spam-like advertisement showing a lonely individual's account balance history with many Bitcoins being received in a short space of time- Often on Instagram, Facebook, Reddit and Twitter. These are just to draw the unsuspecting investors into whatever they are selling. Those accounts with a lot of Bitcoin (or any other cryptocurrencies) are not real. They mined those years ago, Photoshop the balance so it looks that way or use a software I came across some months ago on this site known as the Fake Bitcoin Generator. It is plain obvious that no one can earn a Bitcoin every few hours forever and yet keep advertising on social media to gain some referrals. In this space, no one will be so generous to give away this secret of generating Bitcoin! Those, who do have large amounts of cryptocurrencies (also known as whales) prefer to stay anonymous, just for security reasons and they do not brag about their wealth over the web.
An example of such.
My advice: If there is a wallet address in these posts, search for it on blockchain.info. Remember that the blockchain is a public record book of every transactions that have, is and is about to occur among multiple wallet addresses. Pay attention to the timestamp and the confirmations. Do NOT send any of your hard earned cash or digital asset to them hoping for a greater return and refrain from posting whatever you are earning online.
💂Mining Sites That Offer Free Cloud Mining Power- First, these unscrupulous entities advertise on social media with the promise of a profit on your investment. They use every means of netting in users from bots to famous promoters. Initially, the investor will register to their platform and immediately the site starts to mine for him or her. Then when it comes time to withdraw, the investor has to deposit a certain amount of cash or cryptocurrency in order to do this. The investor might get only the withdrawal (which is often less than what he or she deposited) or get nothing in return. Approach with caution.
💂 Very Expensive Cloud Mining Websites- Not necessarily bad since maintaining mining equipment and electricity to power it continuously are not cheap. The problem I find with some of these is that they can do whatever they want without taking the customers into consideration. They will make the withdrawal amount be so high that only a few can reach it (especially those with a lot of cash). Then there are other factors like difficulty rate going up on a cryptocurrency, the coin becoming obsolete and the company itself decide to close down leaving investors without any compensation.
My advice: If you do not have much capital, stay away from cloud mining. Instead buy some good altcoins or better yet buy Bitcoin and hodl. These are more likely to create good return on investment than one paying a third party to mine. Those with sufficient capital, I can just purchase a mining rig and that alone is an asset or if desire, go for it.
💂Shady Exchanges- Honestly, some exchanges are cruel to their users. Some are vulnerable to hacks (or so a few want us to think) and are very risky places to keep your cryptocurrencies on. Also, these are breeding ground for odd price manipulations and insider trades. Their selection of coins and tokens are at best, scammy in nature.
My advice: Not going to tell you to stay off these exchanges because we are trying to make money here. The best advice I can give you is to keep your coins in a wallet preferably offline like a Trezor, Ledger Nano S, Keepkey or a paper wallet.
💂Paid promotions- Common among celebrities and YouTubers of crypto fame. They are known as shills or shillers. These folks are not often on our side. Many are paid to promote coins (some with no use case apart from generating hype) and with their popularity, they can even influence the prices of these coins for good or bad. I am not saying it is completely bad to promote stuff. In order for a company to be successful, it needs to market its products. Those who are putting in a lot of hard work to produce content should not feel discourage from promoting a coin especially where money is involved.
My advice: Since nowhere is safe from these promotions, you must Do Your Own Research (DYOR) to pick the best ones you think will be a solid investment.
Do what she's doing.
💂Phishing Attack- The scammer buy up several domains and Google ads imitating popular exchanges. These fake websites share similar features with the real ones. As one enter one's personal information, the fake site often directs one to the correct one, having steal your information. With this, the phisher can do whatever with your information including wiping your account clean of every crypto and sell your identity on the dark web for a few hundred bucks. A good example of a phishing site is highlighted in red below.
My advice: Make sure the exchange URL is the correct one. If not type it into the address bar and search. Next, secure your account with 2-actor authentication and an unhackable password of more than eight characters.
💂 Trading Software Which Claims to Earn On Some Cryptocurrency But They Don't- When one register for this, one is given the impression that one will make an unbelievable return on investment. If it is too good to be true, then it is. Some of these programs do not even trade any of the cryptocurrencies and play on the newbie's ignorance and greed. The newbie is more likely to lose his money more than anyone else using this software. All tradings are not the same. Binary options, Stocks, Futures and Forex follow different rules from cryptocurrencies. To truly be in this particular market, one must trade the cryptocurrencies on the exchanges, not on a phishy app made by this person or this company. However, a few of these are legit and will not mislead you.
My advice: Stay away from brokers (most of them are leeches) and do not... and I repeat, do not trade margins. Invest in the digital asset itself because at least you have it whether the price decrease or increase than losing a bet and having nothing to show.
💂And the last but not least, Pyramid and Ponzi Schemes- These share the same principle of late investors and those who do not cash out in time to secure a profit getting burn like the Pump-and-Dump groups mentioned above. In pyramid and ponzi schemes, investors are duped into buying the tokens or coins through a combination of enthusiastic upselling, lack of knowledge of the technology in front of them, and a lot of positive media coverage (of both the project and rapidly increasing cryptocurrency prices). Everyone, who has been in this space for over six months, should be able to recall...
Bitkonnnnneeecc!
We all knew it was a scam but due to FOMO and pressure from our favorite YouTubers, we could not shake the urge to try it out. More than one year of excitement and hype, the steem (sic) began to run out on this program. Daily interest were way below the promised one percent. The authorities got whiff of it and threatened Carlos Matos' rise to internet fame with those cease-and-desist letters. With nowhere to run, they probably orchestrated an external attack on their platform which took days to fix. When they do solve this, it was already too late. They put a stop to the lending after the insiders from the company have made off with most of the money. Investors got the worthless tokens. Bitconnect is now anywhere from the 1000th to the 1500th spot on CoinMarketCap.
You see, I left this one for the last because it is probably the worst of them all. With ponzi and pyramid scheme, friends and families become enemies. Sane people blinded by visions of grandeur become insane. Many quit their jobs. Some took out huge loans. Some deny their family's life savings to invest in something intangible and very volatile. These programs changed the strong willed to the scared and suicidal.
But we must not give up on cryptocurrencies. They will be the next biggest thing since the internet. Mass adoption is on its way. People are getting smarter. What am I saying? Ignore the latter statement. So next time, subscribe for these regular posts (and possibly to win some cryptos in the future). Keep safe and always remember to do your own research.
Good luck.
Source:
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➤What Is Phishing?
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