Do you put your crypto funds or FIAT to work? Do you make use of the lending or the mining exchanges for this? In that case there are chances that you are kind of in financial scam loop. Often these sort of the scams don't get noticed until events like bear market or the crypto winter makes them run away. So recently one of my friend invested into the cloud mining and was not aware of the mining scam, I want to cover this today so that anyone else here who still believes in them can realize where they are dumping their hard earned money.

Let's discuss Crypto cloud mining scams in a phases. We will also see how some of them are scam and some of the others are nothing but the scam waiting to snatch your money.

Phase 1: The Setup of Cloud Mining Scam

A lot of crypto cloud mining companies setup a VPS server and start showing the numbers to attract some of the gullible people who are in search of the miners to put their funds. So anyone who has long term plans to scam people basically need a server setup and also the name to appear as a miner in the list of miners officially counted in the blockchains resource section.

Once this part is setup, they are going to offer the unbelievable percentage for the mining investment. Like 10 percent or so like NEXO and Celsius does. In reality it's often not sustainable to do that for many coins. Yet the offer stands on the official sites investment plans for investment period of 180 days. If customer checks out and decides to put the money they are locked. Which brings our next point.

Phase 2: Lock-in Period of Scam

This is where the real game happens. When the lock-in period is around 90 days or 180 days. You tend to trust the people and then the money is locked in the scam. This period is where they are going to scam as many people as possible. Like each day they are going to get the new sign up. If they run away in 60 days with enough funds the people who locked in for the 90 days are going to lose money.

If you see the daily withdrawal of the cloud mining and also there is no lock in period. In that case there could be a hope like Binance earn has. But that is kind of a rare because crypto winter and the bear market cycles happen every now and then. And so it's not sustainable for the lock in period to work in your favor. Most likely those sort of the lock-in periods are leading to the scams.

Phase 3 - Exit of Crypto Cloud Mining

Now this is where the final act of the drama happens. You go to such sites after few days and then the site is not reachable. Domain is sold and there is no way to trace the owners either. So the exit of the crypto cloud mining already happened. When you choose to invest based on terms of such sites they can exit any day. And they won't remain till the end of the withdrawal period.

Daily withdrawal based cloud miners can be scam too. Because they want a bigger fish and they will eventually get it too. So once they get such person they can quit and all the investment and the daily payouts can stop any time. That's the interesting part of the exit of such scam. They have a specific number on which they choose to exit.

A lot of people believe in NEXO, Celsius and other cloud investment companies which are centralized. I get it, they pay you legit ways and so the doubt may not come into play there. But in reality when the bear market happens such companies file for bankruptcy and the whole centralized scam gets unmasked.

I am not saying every company out there is scam. But the model of cloud mining is not sustainable with high ROI. You would get small slice in return if banks were to be operating this. But that's another discussion.

You choose whether to invest in such scams or not. My job was to show you the facts and what's going on in the market.

Make your call.