Cryptocurrency Scams And How to Avoid Them 0 338

From fraudulent ICO’s to illegitimate coin exchanges, we’ll show you how to stay safe in the world of crypto.

The world is a nasty place. Criminals around the globe are trying their very best to steal hard earned cash away from the people who deserve it. The cryptocurrency industry is no different. Not a day goes by without mention of Bitcoin or ICO scams.

Why all the scamming

During the emergence of any new technology, crooks can take advantage of people’s naivety. During the explosion of the internet, criminals were making fake websites to try get people to buy things that didn’t exist. During the emergence of personal phones, scammers would call pretending to be the tax collector. The list goes on and on. Unfortunately these sort of people are always going to exist, and with crypto it’s no different.  

Another big reason is the lack of regulation when it comes to digital coin technology. Without governmental control, criminals can employ scams without the risk of being caught, which is very attractive.

Additionally digital coins have no physical version, meaning they can be moved around the world in seconds without anyone knowing.

Forms of scamming

ICO scams are one of the most prevalent in the industry at the moment. Criminals offer an interesting business proposition, as well as tokens in exchange for investment. Poor souls invest, only for the ICO to shut down after the money has been siphoned out into untraceable accounts. The best way to avoid this is to only invest in ICO’s that have been verified by multiple sources.

Illegitimate trading platforms also pose a threat to investors. Someone with enough programming knowledge can design a cryptocurrency trading site that looks real. Then once the user has deposited funds, or digital coins, the site shuts down and the owner disappears. The best way to avoid this is by only trading with recommended, well-known trading sites. A list of these can be found at crypto101.com.

Pump and Dump groups have been known to affect certain cryptocurrencies. Users are contacted and told to invest in a certain low cost digital coin because its price is ‘predicted’ to increase. After they convince a handful of people invest, the price is of said coin goes up only for the scammer to sell all there coins at a artificially inflated price, dropping the price massively. This is a classic scam that has been around since there were stocks.

Crypto getting a bad rep

Unfortunately a direct result of the rampant scamming in the cryptocurrency space has resulted in a massive distrust in the Bitcoin and altcoin markets. Fortunately, there are many legitimate ICOs and crypto exchanges out there, making investing very promising. Don’t let a few bad eggs sway your opinion on crypto as a industry.  

For more news about the blockchain and cryptocurrency go to crypto101/news.

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