As the market of cryptocurrencies boils with increasing influx of capital, investing or speculative, the number
of scams and frauds is also mounting at an alarming rate.
The investors are not leaving any chance of investing
into cryptocurrencies as they believe that it is going to give them more profit
than any other investments like mutual funds, retirement funds, stock markets,
etc. <o:p></o:p>
But here they make an err. <o:p></o:p>
Before investing into cryptocurrencies, a lot more
care needs to be taken as there is no central bank or government authority who
is overlooking this mechanism and hence, there are more chances of fraudsters
getting away after scams. <o:p></o:p>
Ever since Bitcoin was created in 2008, there have
been fake companies trying to ride on the enthusiasm among investors to invest
in Bitcoins, resulting in creation of scams. These scams have further led to
the erosion of trust in Bitcoins by various governments of countries. Though the
problem is not the cryptocurrencies but the absence of knowledge among
investors how and where to invest. <o:p></o:p>
Most of the scams of ten revolve around Initial Coin
Offerings (ICOs) as new coins offer a chance to buy at discount prices. <o:p></o:p>
Never make the silliest mistake of giving your
precious money to someone who has promised you to invest that money into
cryptocurrency. If you don’t hold private keys directly, then it’s probably a
bad move. <o:p></o:p>
There is a separate section on website
‘cryptocoinsnews.com’ titled Bitcoin scams which highlight hundreds of scams
over recent past. On 22 November only, South Korean police busted $38 million
ponzi scam. The group targeted new investors in the crypto market who had no
understanding of cryptocurrencies. The scamesters promised investors to pay out
nearly 200 percent in profit on a regular basis, if they invest using Bitcoin.<o:p></o:p>
The Australian Competition and Consumer Commission
said in November that Bitcoin Scams are up 126% in first week of the month.
Post-incident, the authorities began the process of revising existing laws to
include bitcoin exchanges under a regulatory purview.<o:p></o:p>
Let’s see the top 5 Cryptocurrency Scams:<o:p></o:p>
1)
Onecoin<o:p></o:p>
Onecoin is a ponzi scheme-based token that runs on a
private blockchain managed by the Gibraltar-based Onecoin Ltd. Its company
stole more than $50 million in about one year of illicit sales that happened
due to a strong Facebook marketing strategy. The scam was first revealed in
China and Italy. <o:p></o:p>
2) LCF coins<o:p></o:p>
LCF Coins are promoting themselves through Google
Forums selling more than 600,000 products without having any website or social
media presence. But Rothschild & Co has recently warned against investing
in this cryptocurrency, saying it may be a scam. <o:p></o:p>
3) Centurion Coin<o:p></o:p>
Centurion Coin has opened a charity foundation. On its
website, there are team members, but the identity of the people who control the
scheme is hidden. This ‘charity’ was donating 5 million tokens on the market.
Doesn’t that sound incredibly suspicious?<o:p></o:p>
4) Earthcoin<o:p></o:p>
Earthcoin is the most dangerous scam because it is
even listed company on coinsmarketcap. But the coins are pre-mined and even
insta-mined, suggesting that the coin’s initial supply is generated
automatically before the public launch. <o:p></o:p>
5) S-Coin<o:p></o:p>
S-Coin (Coinspace) is selling 12,000 packages of
tokens, but their value is not attached to any entity and without the basic
tenets behind supply and demand, it gives us all the signs of a scam.<o:p></o:p>
There are other ways that are commonly adopted by scammers and potential investors should also be alarmed of.
Fake
wallets <o:p></o:p>
Be careful of fake wallets that steal your coins. Make
sure to use official wallets endorsed by the companies and follow carefully the
instructions mabe by the company. <o:p></o:p>
E-Coins<o:p></o:p>
The difference between cryptocurrency and E-Coins is
that the former is stored on distributed networks and use blockchain technology
and the latter is under the provider’s control on its own servers. <o:p></o:p>
Phishing<o:p></o:p>
This is the oldest tactics used by scammers to
impersonate as a developer team and offer “special rates” for new token sale.
Recently this ICO scammer was found out who scammed $10,0000, he was later
identified by the Etherscan who labeled him as Fake_Phishing58. <o:p></o:p>
How
to protect your investments
Before your cryptocurrency investment, read this
websites such as ‘badbitcoin.org’ to see if that crypto is already registered as a scam.
An investor should do a lot of ground work and be careful about ICOs and
unknown companies selling tokens on the web. <o:p></o:p>
<o:p> </o:p>
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