How to spot crypto scams?
Image taken from https://www.pymnts.com/news/security-and-risk/2019/crypto-scam-india-millionaire/

How to spot crypto scams?


Scams are omnipresent in the cryptosphere since the early age, from the fake ICO to the fake exchange. Scammers never miss a chance to steal your capital. Today, I'm going to show you some basic scams and tell you how to avoid them.  

Pump and Dump 

The Pump and Dump scam is a well known one, the "project" safemoon is the perfect example of it. It's a group of people that hold a huge amount of a crypto they created (like 70-80% of all supply), to make the market going up and down. Sometimes, when the coin has no more interest/value, they escape with all the money without letting any trace.  

How to spot it? 

"High quality" scams are more and more frequent since cryptos went mainstream. But the easiest way to spot a bump and dump scam is to look at the chart. You will definitely see the market going like a saw with extreme high and extreme low. Pay attention to that and withdraw your money if you see a "saw" chart (if you still have time).   

Pump & Dump

Image taken from "LiteForex Traders’ Blog"

Fake ICOs 

That kind of scam is one of the most common scam out there. The scammers just have to create a fake team, with a fake website and a fake project, so you will buy something that don't really exist.   

How to spot it? 

Fake ICOs usually have a really generic website, like a kind of template that every scammers use. They also usually have a sh*tty white paper with no community. The thing is that, sometimes, it's really done by real graphic designers and community managers that just escape with all the investment, it makes it harder to spot, but always trust yourself, if you don't feel a project (even on a single point) don't invest your time and money in it.       

Fake Ico Website

Here is an example of a fake ICO website

Exchange scam

This is also one of the most common scam, but it can be a way harder to spot than others. Some fake exchanges are really well done and sometimes, some of them are launched like real projects, but at the end, we see their "CEO" escaping with all the exchange capital. Recently, a fake exchange "CEO" stole two billion dollars in BTC (Turkey) by stealing every customer's money.   

How to spot it? 

Sadly, it can be really hard to spot that kind of scam, the only way, is just to not use unregulated exchanges. Only use the well known ones, and never trust these exchanges that promise you too high rewards.   

Fake crypto exchange named Thodex

Thodex was a normal unregulated exchange until the "CEO" escaped with two billions in BTC

Conclusion 

Today we saw the three major scams around cryptos. I hope that you will pay attention to where you invest your coins into, because there are so many possibilities to get caught. The best thing to do is to deeply analyze projects before putting money into it (is the market cap high, was the 24h Vol decent, is the white paper well written and logical,...). Always try to spot the red flag and never trust nobody, "all they want is your money".

Our Crypto Toolkit

Play games and Earn / Invest easily / Start Trading

How do you rate this article?


15

0

Urban Masters (Crypto)
Urban Masters (Crypto)

Urban Masters (Crypto) is a totally new community about cryptos. Follow us on instagram : @urban_masters_crypto


Urban Masters (Crypto)
Urban Masters (Crypto)

Urban Masters (Crypto) is a totally new community about cryptos. Follow us on instagram : @urban_masters_crypto

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.