Types of Crypto Scams you should be aware of


The price of Bitcoin has been going up and that factor alone is what makes this cryptocurrency such a popular hunting ground for scammers. When it comes to money markets, there are abound to be scammers but it is the lack of tracking that makes cryptocurrencies more popular than others.

Benefitting from the wave

What goes up must come down, but the price of Bitcoin has been hovering at levels that have gone from modest to unbelievable. Since it was introduced in 2009, Bitcoin has been attracting a lot of attention and one of the biggest problems that people are facing is in knowing how it works. While it makes sense to want to be riding on this bandwagon, you need to be extra careful with where you are channeling your investments before you get scammed.

Know the scams and be careful

As easy as it is to be profiteering, you could also be easily be cheated. Below are some of the scams that have surfaced in the cryptocurrency market.

  • Dubious Bitcoin Exchanges – One BitKRX came out in 2017 where it operated as a digital exchange in South Korea. It was a fake trading platform and was then known as among the largest ones.
  • Ponzi schemes – Like any other investment engine, Ponzi schemes have surfaced in the cryptocurrency market. BitClub is one of them where the fraud was exposed in 2019 with funds worth more than $700 million being cheated.
  • New Cryptocurrencies – Each day, reports of new cryptocurrencies surface and this works well with those that missed the Bitcoin train. They want to invest early and new (fake) cryptos are attractive options. One such case was My Big Coin which reportedly cheated more than $6 million.
  • Pump-and-Dump – This is one of the many old-school scams which has been around for the longest time. How it works is that a group of ‘investors’ will buy cryptos to push the price up. They will then on the other hand find outsiders to invest where they promise high returns. Such scams are very popular in most money markets.
  • Traditional Scams – Someone will call you claiming to be from a government agency or authorized department. They will most likely tell you that you have backdated taxes to be paid and that you should use cryptocurrencies to pay if you do not have enough cash at hand. Most users will fall into this trap.

As a rule of thumb, investing in cryptocurrencies is very much similar to other financial engines. You need to do enough homework before trusting anyone with your money (physical, digital or otherwise). Always work with names that are established and regulated and that should be the safest route if you do not want to be scammed.



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