Discover the various strategies scammers use to trick you into sending them money and how to easily identify and avoid them.
"The phenomenal growth in the value of cryptocurrencies like Bitcoin over recent years has attracted investors, speculators, and thieves." ~CipherTrace
A total of $1.7 billion was lost to cryptocurrency scams in 2018 according to a report published by the popular cryptocurrency analytics firm, Cyphertrace.
According to a report by the Wall Street Journal (WSJ), cryptocurrency scams took in more than $4 billion in 2019 alone.
As of July 2020, cryptocurrency scams have already accounted for more than $381 million as reported by Bitcoin.com.
What are Cryptocurrency Scams?
Cryptocurrency scams are any schemes or systems devised and designed to swindle you.
They operate mostly by playing on your, ignorance, GREED, and desire to get-rich-quick.
Promising you "free money" or a "once in a lifetime opportunity" to make some highly unrealistic returns on investment (ROI).
It's easy and simple. All you need to do is send this small $$ amount. And if you want to "make it BIG" at once, use some of that money in your retirement savings account. blah blah blah"
And who doesn't want to be "rich overnight".
But don't.
Types of Cryptocurrency Scams
Now let's take a look at the common ways that cryptocurrency scammers operate and the strategies they use to trick you into sending them your money.
There're 21 below, but there could be more. If you know of other scam formats they use that are not mentioned here feel free to share with us in the comments section below.
Types of Cryptocurrency Scams
- Presale or ICO Scams
- Bitcoin Account Manager Scams
- Phishing Scams
- Support Team Scams
- Cloud Mining Scams
- Investment Platform Scams
- Pump and Dump Scams
- Giveaway Scams
- Influencer Scams
- Exclusive Private Sale Pool Scams
- OTC Trade Scams
- Rug Pull Scams
- Internal (Self-Hack) Scams
- Scam Crypto Exchanges
- Scam Crypto Wallets
- Exchange Listing Scams
- Partnership Scams
- Accomplice Scams
- Referral (Affiliate) Scams
- Begging Scams
- Love Scams
Ok, now that's a long list.
Let's briefly explain each of them, how they work, and the best ways to avoid them.
Types of Cryptocurrency Scams:
1. Presale or ICO Scams
Initial Coin Offerings (ICO) and Presales are a way for cryptocurrency projects to raise capital by selling their tokens to early investors at discounted rates.
So, you're asked to buy the token via their website, telegram, discord, etc. at a discount.
It's simple, send the Bitcoin or Ethereum equivalent of the token you want to buy and be among the first holders.
After the presale, the token will be listed on an exchange for trading at a much higher price, usually, almost 2x the ICO price and you can sell it for a big profit if you don't want to hold it for the long-term.
Or you can just sell a part to remove your original capital and some of the profit and ride the rest to the moon or hell.
Now that's ideally how it's supposed to work but scammers are taking advantage of this to defraud unsuspecting investors.
In a scam ICO or presale, everything goes as usual, but you will not receive the promised tokens.
And sometimes, they will even send you the tokens but walk away quietly. Thus leaving you with a token that's worth less than an ass wipe.
You wouldn't be able to sell or do anything whatsoever with it. You simply just got robbed.
Feel free to organize a mourning party for your money because it's so gone.
How to Avoid Falling a Victim?
- Never participate in ICOs of projects with an anonymous team. Period!
- Buy into only ICOs conducted via launchpads of established exchanges (initial exchange offerings -IEOs) and platforms such as TrustSwap Launchpad, etc. Almost all major crypto exchanges now have launchpads that you can participate in.
- Moreover, IEOs guarantees that the token or coin will be listed on the exchange that hosted the IEO. That means you'll be able to sell shortly after the IEO is over if you want to.
2. Bitcoin Account Manager Scams
I want to say a big thank you to "Scammer Name" helping to manage my Bitcoin account. In invested only $1,500 with them and in less than 2 weeks they grew it to $15,000. I advise you to try "Scammer Name" if you want to double your money.
Hi! I am "Scammer Name". A cryptocurrency account manager. Do you want to double your money?
This is one of the lamest cryptocurrency scams to fall for.
And they're everywhere.
Especially in the comments section of popular posts on Twitter, Instagram, Facebook, Telegram groups, etc.
Once you send them your Bitcoin or any cryptocurrency for that matter to "manage" or "grow" it for you, they'll disappear, block you, or tell you that you need to send more to receive your earnings.
