How to Spot Scam Cryptocurrencies

By Boris Dzhingarov

Scam cryptocurrencies are not legit. They use a combination of greed and ignorance to get your money. Listed below are three characteristics of scam cryptocurrencies. First of all, they don’t guarantee fixed profits. And second, they generally favor official tokens like USDT, USDC, or DAI. So, how can you spot them? Here are some tips. And remember to be skeptical of anyone you meet online. Don’t send any cryptocurrency until you have met in person.

Scam cryptocurrencies do not offer fixed profits

Scam cryptocurrency investments are a major concern for investors. Because they provide less protection and have less regulation, it is hard to tell which ones are legitimate. Investing in these projects should be done with caution, but not by refusing to learn more about them. Beware of bogus advertisements, especially those that use celebrity endorsements. Unlike regular investments, cryptocurrency investments do not offer fixed profits. They can also require a high initial investment and can lose your money in a matter of days.

If you see a crypto offering that promises you fixed profits, run the numbers and run it past a friend or professional with experience in the field. Scams will often be based on offers that require you to invest large sums of money in exchange for a set amount of cryptocurrency. Such an offer should be interpreted as a scam. In most cases, this is the only way to protect yourself.

They favor USDT, USDC and DAI

Scam cryptocurrencies are the ones that make you think twice before buying. USDT, USDC and DAI all have negative reputations, and some have been hacked or have ceased to exist. While some of these coins have legitimate value, they are not as popular as they may seem. In order to avoid getting scammed, it is important to do your research before purchasing any of them.

Despite the negative press surrounding these coins, the Tether company is keen to correct this FUD and has been delaying revealing their assets. These cryptocurrencies are convenient for short-term trading but not for long-term holding. USDT is linked to a commercial operation, so it introduces a high risk compared to true decentralized cryptocurrencies. For this reason, many scam cryptocurrencies favour USDT, USDC and DAI.

They take advantage of greed and ignorance

There are a few common ways to identify scam cryptocurrencies, and you can avoid them by using your common sense. These scams operate under the theory of a pump and dump, where new investors fund the old ones, who then continue to pay them. As the market is too volatile to offer fixed, regular returns, pump and dump schemes quickly go bust. This type of scam occurs in two distinct forms: a pump and dump group, and a project team. The pump and dump groups and individual projects regularly pump and dump coins on their investors.

Scam cryptocurrencies also exploit the ignorance and greed of cryptocurrency users. Some of them go straight for deception, such as OneCoin founders who defrauded investors out of $3.8 billion by convincing them that their cryptocurrency was real. Others use technical jargon to impress their potential victims. Scammers have even gone as far as claiming that they can exploit price differences in cryptocurrency exchanges through arbitrage. These scammers are able to take advantage of the fact that people don’t understand the technology and can’t quickly gauge the risks associated with it.

They favour OneCoin

Dr Ignatova, the woman behind One Coin, was charged with money laundering in the United States in absentia. The Department of Justice also called One Coin an old-fashioned pyramid scheme. Despite the hi-tech veneer of these scams, they are the same old tricks. They are a far cry from the excitement that Bitcoin sparked when it was first introduced as the next revolutionary financial system. Blockchain technology was the next big thing; initial coin offerings were supposed to replace Initial Public Offerings.

During the initial days of the OneCoin scam, it was believed that the scheme had stolen at least $4.4 billion in sales revenue. However, recent news reports indicate that OneCoin may have taken as much as $19.4 billion from victims of the Bernie Madoff fraud. If this is true, OneCoin may well be the largest financial scam in history. But, the fact remains that OneCoin’s scam is still ongoing.