Cryptocurrency pyramids and scam projects
Bitcoin and other cryptocurrencies fall and rise, making investors nervous and giving traders an opportunity to make money. However, whether the market rises or falls, it doesn't make it any less of a hobbyist to eat your hard-earned money.
Most often unsophisticated people who do not know the intricacies of using digital assets fall for the tricks of criminals, so today we will introduce you to the most common ways of fraud in the cryptocurrency market.
Cryptocurrency pyramid scheme
The method of a cryptocurrency pyramid is that you will be promised huge profits with very little investment in the project on your part. This is the general principle of the classical money pyramid: investors make profits by investing new people. Naturally, the biggest profits come to those who organized it, and when the flow of investors dries up, the pyramid ceases to exist.
Characteristic features of a cryptocurrency pyramid:
- organizers in confirmation of their honesty put up screenshots of transfers of huge sums, promising you exactly the same, or even greater profits;
- You will definitely be guaranteed that you will not lose your money in any way;
- You are unobtrusively, and sometimes obsessively, rushed to invest money, because "then it may be too late;
- The owners of the project do not hide their names, which, in fact, most often fictitious, and some verified real information on them you will not find anywhere;
- withdrawal of "earned" funds is fraught with constant problems;
- in social networks, messengers and forums is a persistent advertising campaign of the project, widely distributed links, promising a good bonus on registration.
Scam wallets and scam exchanges
The word "scam" on the cryptocurrency market refers to a project that involves the receipt of money from investors, which subsequently for some reason ceases to pay profits.
Digital assets exist on the Internet, so all scam projects are sites that can look like a cryptocurrency wallet, trading platform or combine both functions.
Naturally, to raise money from investors and run away immediately would be the height of folly. That is why scam projects, once they appear, demonstrate normal operation for a while, accumulating capital, gaining the trust of clients, and putting their guard down.
Customers don't have to worry about contributing cryptocurrencies to their accounts opened in the project, and can even make some profit. However, once the accumulated amount reaches the goal required by the scammers, the money deposited in the project can be forgotten about. Meanwhile, the scammers invent various reasons explaining the collapse of the project. For example:
- hackers broke into the accounts of project administrators. This is the most common reason, which, moreover, is almost impossible to prove.
- Funds were lost as a result of a mistake by one of the employees. Also a very convenient way of blaming it on one person, whose name, for various reasons, is kept secret.
- Project partners (banks, payment systems, etc.) do not fulfill their obligations. This is yet another "translation of the arrows" that makes the project look innocent of losing client funds.
In most cases, the owners of the project are not to blame and raise their hands saying that we are doing everything we can. But sometimes cheaters work more clumsily - they simply shut down the project website and disappear with cryptocurrency of their clients.
How not to get on the scam projects:
- Carefully read the reviews of the project on several reputable resources;
- Avoid new, and even more so, anonymous marketplaces, browser extensions and applications;
- give preference to only known and proven wallets and exchanges;
- Try to find information about the owners and employees of the project.
Conclusion
Of course, the emergence of cryptocurrencies has given fraudsters ample opportunity for fraud, especially given the anonymity underlying all cryptocurrencies. Fraudsters are constantly being fought. For example, a list of fraudulent projects can be found at The bad list и List of Bitcoin Scam Sites.
However, it should be understood that the relevance of such blacklists is rather questionable - it is not difficult for attackers to close one site and open another.
That's why the security of your cryptocurrency funds is your first priority. Informed means armed. And we are sure that your caution and attention will not allow any fraudsters to take your money.
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