Top 10 CryptoScams

Reader's Choice Spotlight

Understanding the Top 6 Most Common Types of Crypto-based Scams! 

Special Post of

An Almost-Weekly Newsletter Featuring a Spotlight on Past, Current, and Suspected Top Ten Cryptocurrency and Blockchain-based Scams

by

W. Paul Alexander 

for The

Blog on Publish0X

Continuing Our Deep Dives into the World of Fraudulent Blockchain-related Schemes, it's

Top Ten CryptoScams

Start By Reviewing this Amazing Ponzi Scheme Infographic from the folks over at CoinSutra.com!

Hello Loyal Readers both Old and New! 

I'm doing something a little different.  

As you are likely aware, so far I have covered three (3) of the most infamous CryptoScams to hit the CryptoVerse -- USI Tech, BitConnect, and Empowr. 

Who I cover next I want to leave up to you.  

So, in the comments below, leave your choice for the next three CryptoScams for me to cover.  

You can choose any of the following types of Crypto-based scams.  Whichever gets the most mentions in the comments below will be the next targets of my spotlights.  

From CoinSutra, here are the main categories of CryptoScams (category titles from https://coinsutra.com/cryptocurrency-scams/ with expanded descriptions from your author). 

1. Fraudulent ICOs

The most common way to pull off a scam is to fabricate a fake ICO, create marketing hype and persuade people to buy.  This was especially true during the ICO bubble of 2017, and Ethereum-based token projects are the most common type of fraudulent ICOs.  Some of the worst ICO schemes were so bad that their ROI losses were comparable(expressed as a percentage) to the devaluation of the German Mark during hyperinflation of the 1920's.  

2. Shady Exchanges

The second most common form of scam that you will come across would be a ‘shady exchange’.  These can be hard to spot sometimes, because people tend to use different markers to determine what they consider shady.  Most of the controversy arises over the fact that some exchanges require PATRIOT-ACT required "Know Your Customer" (KYC) information to be obtained and some do not, and people in the CryptoVerse have strong feelings one way or the other regarding KYC.  For instance, Coinbase requires KYC and was the subject of an IRS demand for all of their customer information, for which they complied.  So, when it comes to exchanges, just do what we suggest you do anyway -- your own research!  

3. Fake Wallets

With the launch of Bitcoin, many fake android wallets have also been launched on Google Play store.  There have also been web-based wallets that have disappeared with their users' funds.  My suggestion here is to again, do your own research.  Make sure to choose a wallet that has a great reputation on forum sites like www.bitcoingarden.com to see what other users have to say.  More importantly, though, make sure that you choose a wallet that allows you full control over your private keys without them being disclosed to the company.  

4. Pyramid or Ponzi Schemes

Here, we cover Ponzi and Pyramid schemes at a bit of a disparate rate, because we these tend to be the ones that are able to steal the most money for the longest times.  Refer to the infographic embedded into this post to help you identify potential Ponzi schemes.  BitConnect was an example of a Ponzi scheme with a blockchain twist. 

5.  Phishing Schemes and Downright Impersonations

These two go hand-in-hand.  Scammers will create lookalike emails and web presences and then send you messages that create some sort of urgency, like "Your Account has Been Compromised.  Click Here to Verify your Information."  When you enter the information, you will later go to find that you have been robbed of whatever you had on deposit with the account for which you "verified" the information.  In reality, you have simply given your login details to a scammer and have been robbed blind.  

The thing about these is that most people think that they are too savvy to be lured in by a phishing scam.  And they continue to think that, too -- right up until the moment they realize they have been the victim of one.  So, vigilance is the key here, along with DYOR, as always.  Most legitimate sites will NEVER ask you to verify a full account number, social security number, or anything like that.  If you are verifying information with anyone, always make sure you do it over the telephone with a live person at the telephone number given by the company for customer service ONLY

6.  Pump and Dump Schemes 

These fraudsters utilize misinformation to artificially manipulate the value of a low-value asset so it creates the illusion of being worth more than it is, getting unsuspecting people to pour their money into a worthless asset.  Once enough people have bought in and artificially increased the value, these fraudsters perform a massive sell-off, leaving the victims holding the bag.  The rule of thumb here is that any exchange where stocks, assets, and commodities are traded carry the warning that trading is done at your own risk.  Never buy into a project or sell off your existing assets without comparing the asset's performance history as well as price predictions and analysis by other experienced traders or marketwatchers.  

Whew!  With So Many Scams Out There, How Do We Keep Safe?  

First and foremost, please understand that we are NOT in the business of spreading FUD.  I believe that our future stands absolutely zero chance of existing in a blockchain-free state, and that mass adoption of cryptocurrency as a whole is less than a decade away.  Cryptocurrencies present so many opportunities where large fortunes will be made by many common people, shifting the distribution of wealth.  This means that it is also a major disruptive technology -- probably on par with the IBM PC and original Macintosh 128K and the PC revolution.  It is the evolution of the financial markets, which are so resistant to change.  Because wealth will be redistributed and adjusted through this process, there will be many losers.  Many, many losers.  Understanding the risks out there will help you make better decisions about what you are investing with or participating in.  

So, no -- we do not believe in FUD.  We believe in a light being shone onto those who would do us harm! 

So, until next time -- Stay Safe, DOR, and Have Fun!  You're an early adopter of one of the most world-changing opportunities ever!  Realize the gravity of that fact and continue making the CryptoSphere the PLACE TO BE for 2020 and beyond! 

Hope to hear your votes below for the next scams my loyal readers want me to cover.  Leave a comment below with the name of the scam you want me to write about in our next weekly alert. 

Deo Volente! 

 --W. Paul Alexander 

To See Our Most Recent Post Compiling the Last 3 Scams we have Covered, read our post on the Top Three CryptoScams:  USI Tech, BitConnect, and Empowr Marketplace