Four Crypto Scams Schemes

By Evan Ducktator on ALTCOIN MAGAZINE

Crypto industry is full of scam scandals, and I’ve been chewing the fat for months about the biggest ones. Blockchain and crypto are hard nuts to crack, and some of the newbies don’t like to get into details and that makes them the perfect targets for resourceful scammers.

To protect yourself from being tricked, you need to know your enemy. Here is the list of typical fraud schemes that everyone should beware of.

Fake Wallets And Exchanges

Scammers made a bundle on fake exchanges and wallets. They might look almost the same as good reputation exchanges, but they aim to steal your money. After a user deposit currency, it might charge high fees or make money withdrawal almost impossible. However, most often, scammers steal money from an account. What’s more, scammers may take such confidential info such as social security number and credit cards information.

Ponzi Schemes

One doesn’t need to be an eager beaver to launch a Ponzi scheme. In short, all a scammer need to do is to promise investors a high profit from depositing money into an “investment program”. The first contributors receive their piece of the pie, providing a good reputation for such fraud. Then more and more people want to make a cheapjack. As a result, a scheme collapses because a founder isn’t able to return money to all of the contributors.

ICO Scam

The thirst for fast profit made ICO one of the most popular fraud schemes in the crypto industry. Just for the record, in 2017, 78% of ICOs were scams. Unlike Ponzi, ICO founders need to be as busy as a bee before achieving any result. ICO requires hard marketing work to convince more investors to buy crypto that didn’t exist. Once a target is achieved, an ICO founder disappears and flush with the money of deceived investors.

Pumps And Dumps

Last but not the least, pumps and dumps, probably, is the most sophisticated type of scam in my list. Big groups of pumpers pick an altcoin with a small market cap and buy it in a short time period. Thus they make this token price to grow. Then they sell it making a profit on a significant price rise.

I’m not going to make any conclusions. I will provide you will useful info. So here is a list of simple rules on how to protect yourself from fraud:

Never share your private keys with anyone;

Always double-check addresses;

Use a cold wallet;

Stick with established providers;

Use 2-factor authentication.

Now I did everything I could. Everything is up to you.