Crypto Scams Myths: Crypto Project Failures are Not Scams

Why Do Crypto Projects Fail?

Not All Failed Crypto Projects are Scams: What Exactly are Crypto Scams?

What are the Most Common Cryptocurrency Scams Investors Face?

  • Fake websites or wallets: Crypto scammers sometimes create copies of popular crypto trading platforms or wallets to trick new users. The fake websites usually have similar domain names and interfaces as the actual sites they mimic. These fake websites usually work as phishing pages; this way, all your personal and financial details you enter (like your crypto wallet’s password or recovery phrase) end up with the scammer.
  • Pump and Dump Schemes: Fraudsters would sometimes hype up a crypto coin through social media pages or emails. Entrapped, crypto traders would then rush to buy this coin, further driving up its value. Once the price is suitably inflated, the scammers sell their own holdings, causing a market crash that leads to the crypto’s value decimating.
  • Phishing crypto scams: Users are sometimes sent fraud emails and messages by scammers, asking them to click on a website link. These links usually lead to specifically created websites that ask for users’ private key information and suchlike.
  • Giveaway crypto scams: Cryptocurrency scammers might promise to match or even multiply the crypto users send to them in a giveaway scam. The pull of this ‘golden opportunity’ might lead people to transfer funds quickly to these fraudsters in hopes of an instant return.
  • Fraudulent ICOs (initial coin offerings): Fraudsters may announce a new crypto coin and offer to send users the new coins in exchange for their investment. This is perhaps the most common kind of crypto scam, with several ICOs in the past few years that have turned out to be fraudulent.

How to be Safe from Scams Related to Crypto?

  • You should not consider investing in any crypto project that does not have a clearly-worded whitepaper explaining the project.
  • Any crypto project that guarantees you bug returns will very likely turn out to be a scam since no investment can ever ‘guarantee’ you future profits.
  • Excessive marketing for a crypto project is also a red flag.
  • Remember to research a bit on the backgrounds of the developers and team members before investing in a crypto project. Unnamed team members are another sign that the project might be pulling a crypto scam.
  • Most importantly, any crypto project offering free money is very likely a scam.

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Dr Vin Menon

Dr Vin Menon

A blockchain enthusiast and entrepreneur’s musings on the next big revolution since the Internet.