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Identify Cryptocurrency Frauds

Identify Cryptocurrency Frauds

However, this growth in the value and acceptance of digital currencies by various companies has also had consequences. While people with good intentions are looking for investment and possibly profitability and want to shape part of the future world of money, people with intent are trying to deceive market investors. For this reason, Antidolos decided to write the Identify Cryptocurrency Frauds article to inform its audience.

In the article of Identify Cryptocurrency Frauds , you will get acquainted with the common types of scams in digital currencies and learn how to identify and avoid each one. We have looked at the most common forms of fraud in this area, but other specific methods are still very similar to these common types.

The approach of powerful investors towards digital currencies

Potential investors often avoid investing in this growing industry due to the ever-increasing number of cases of digital currency theft and fraud. Experienced investors in other markets are also reluctant to invest in the digital currency industry. For example, following the heavy investment of Elon Musk, Tesla co-founder Bill Gates warned users. The founder of Microsoft cautioned that those who have less money than Elon Musk should be careful about buying bitcoins. He emphasized his previous position, adding that he did not have a favorable view of bitcoin.

The approach of Identify Cryptocurrency Frauds in developing countries

Unfortunately, these Crypto scams are much more prevalent in developing countries, which have weaker economies than developed countries. The promise of astronomical profits from fraudulent schemes and poor economic conditions has gone hand in hand to trap many people in these countries. Also, because digital currency transactions are anonymous or semi-anonymous and easy to carry out, it is complicated to prosecute these crimes, which has strengthened fraudsters. So if you are a user from a developing country, the Identify Cryptocurrency Frauds article can be much more critical.

Ponzi and pyramid projects

Ponzi and pyramid projects

The Ponzi scheme is a kind of investment scam ICO that deceives people by promising to pay big profits to exist investors from new investors. Without exaggeration, Ponzi schemes and pyramid schemes make up the bulk of this scam. These projects are the basis of many forms of Ponzi schemes. We suggest that to Identify Cryptocurrency Frauds, one of the most important principles is to avoid Ponzi schemes.

In this scheme, the scammer encourages ignorant people to give him their money to invest in one or more very profitable projects. The profits of these schemes are so high that many people are deceived.

At the same time, investors’ money is not invested anywhere, and only with a kind of game with cash, the interest of the older people is paid, the interest of the older people is gained to gain trust in the system more people enter. Eventually, when they raised enough money for the scammer, and many more people did not enter, the plan fell apart, and the scammer escaped.

An example: To better understand the Ponzi scheme, consider the following model (names and numbers are hypothetical)

How to find Ponzi mining ?

Alex is a scammer who wants to do a Ponzi scheme. He sets up a fake company or site, where he promises people that if each of them pays, say, $ 100, he will invest in that digital currency market or anywhere else, and $ 20 a month (20%). It pays guaranteed interest to investors. But in reality, there is no investment and only play with money. New investors to Identify Cryptocurrency Frauds should be aware of such scammers.

After some time of publicity and initial investment, Alex has now raised millions of dollars. For the project to continue and attract more money, Alex pays the initial investors interest from the new investors. This technique allows older customers who have initially made a profit to introduce the scheme to their friends and acquaintances and newer investors to enter the field. So note that if one of your trusted acquaintances and friends claims that this Ponzi scheme is different from other previous scam plans, his claim is not valid. Your friend is not going to cheat on you. Your friend may have received your benefits on time when he or she suggested the plan. But rest assured, this will not be permanent, and the system will soon collapse.

What will happen to investors after attracting a lot of capital?

After good money is raised or when no new investor is found, Alex runs away with the money, and the plan falls apart.

The most famous Ponzi scam in the digital currency industry was the Bitconnect project, which surprisingly managed to reach a market value of $ 2 billion and become the most significant scam in the world of digital currencies to date. This project was destroyed in 2018. At the end of its operation, the Bitconnect project was valued at $ 2 billion and cost $ 450 per unit. Less than 24 hours after the scam’s official announcement, this coin’s price dropped to $ 6, and its market value reached $ 40 million. Shortly afterward, the project was removed from all exchanges.

Identify Cryptocurrency Frauds

Scam methods through Ponzi schemes

  • False advertisements for an astronomical investment or activity spread quickly.
  • Novice investors fall in love with these lies and invest in these fake projects.
  • People are told to log in to their friends and relatives for more profit.
  • Initially, to gain trust, older people benefit from new people’s capital to attract more people.
  • Scammers then disappear to get a large portion of the money and give their accomplices a small percentage (affiliates).
  • There are also one or more low-quality products in pyramid schemes that people have to sell at high prices.
  • Such platforms are easily recognizable. They deceive the naive with the offer of a quick return on investment, and these people only realize the reality after being sacrificed.

How to Identify Cryptocurrency Frauds and avoid Ponzi schemes

  • Always make a rational decision, and if you think the goal and promise of the project are too unrealistic, it probably is.
  • First of all, ask yourself why you are going to be paid such a profit when an intelligent person you know is building a fire to make money from his company? Why didn’t the others go for it?
  • Most Ponzi schemes do not disclose their owners’ information. They keep information out of the reach of investors. People often blindly get involved and invest, but no one is held accountable when things fall apart.
  • You must have information about the ownership and history of the platform. Find answers to questions such as the platform manager’s identity, the head office address, or when it started.
  • Check the legal status of the platform. Does the construction team have legal authority to manage the platform from the relevant authorities? If something goes wrong, can you complain about them?
  • Check out these projects on various forums and websites.

Cloud Mining and Telegram Mining Robots

Mine digital currencies without a device,” “earning millions with bitcoin mining,” “renting a mining device,” and “earning free bitcoins in the Telegram robot.” If you see these titles in ads, Be careful. After Ponzi projects, most digital currency scams are done with these titles. Therefore, to Identify Cryptocurrency Frauds, we must be cautious with them. Unfortunately, cloud mining’s growing popularity has opened the door of scamming for fraudsters due to the high cost of electricity and digital currency mining equipment. To begin this discussion, we must first know what Cloud Mining is.

Cloud Mining

Most cloud mining projects or telegram robots are Ponzi schemes. Investors think their money will be spent on buying mining equipment and mining when there is no mining.

If you think that you do not need to pay for Telegram robots. You should know that in these robots, after your capital reaches the bottom of the withdrawal. And you will only be allowed to witdraw if you or your affiliate has bought from the robot.

How to separate valid mining and Identify Cryptocurrency Frauds?

Anyone a little interested in the world of digital currencies has probably heard of mining. If you are new to the world of digital currencies, you probably do not know precisely how mining works. Therefore, scammers try to present their mining programs as abundant monetization opportunities.

The method of scam through cloud Ponzi mining

  • Scammers ask users if they know anything about mining.
  • Regardless of user responses. Scammers claim that there is an opportunity for mining through which a person can earn a large number of bitcoins.
  • They put a calculator on their website to invest their initial capital and see the profit they make. Many people tempt when they know that they make $ 200 a month by paying $ 1,000.
  • Interest initially pay through the Ponzi scheme. But when a lot of money collected, deposits delay. And users’ accounts blocked under various pretexts.
  • Eventually, the scammer escapes if he is lucky, leaving only the losers.

How to detect and avoid cloud mining scams

  • They usually advertise with the following titles:
  • “Cloud mining.”
  • “Mining without a device.”
  • “Making millions from bitcoin mining.”
  • “Renting a mining device.”
  • Mentioning the name of websites in reputable news agencies and sites is not a sign of their health. Anyone can publish advertisements (ad reporting) on ​​the Internet for a small fee.
  • Sift through the website. Mining is a risky activity and does not guarantee a profit. Reputable websites (99% of cloud mining websites are not reputable) sell only hash (processing power), not investment panel.
  • Ask yourself, is the location of their mining farm known? Don’t forget that most cloud mining scams fake video from their farm. Make sure the video is not fake.

We hope you make the most benefit of the information provided in the ” Identify Cryptocurrency Frauds and Ponzi mining ” article. Thank you for accompanying Antidolos to the end of this article.

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