The concept behind cryptocurrency was to introduce a virtual currency that could be used as a medium of exchange for various transactions. Moreover, these transactions are said to be much secured and controlled for the creation of additional units by using the blockchain concept. With cryptocurrency being availed for the common public it has experienced major growth in a limited period of time.
People have invested hundreds of thousands of dollars and it has become one of the growing investment markets with Bitcoin being the most popular cryptocurrency available in the market. Considering the rapid growth, numbers of fake cryptocurrencies where introduced and a number of scams have also been reported. One must be well-aware about the type of crypto scams so that they can protect themselves from such frauds and can save their valuable money. Below is the list of crypto scams
- Insecure exchanges
The cryptocurrency exchange is a business which allows the customers to trade their cryptocurrencies for other assets. It has been a growing market as the providers were earning great through the commission for the services. Considering the growth in exchange, a number of shabby exchange options have been introduced and people across the world lose around millions of dollars to such scams. Hence, one must learn about the businesses before dealing with them and should research about their company, base, and in-depth details.
2. Fake ICOs
ICOs or Initial Coin Offerings is considered as an unregulated and controversial way of crowdfunding using the cryptocurrency. As per the reports, around 805 of the ICOs which were launched in the year 2017 were scams. Number of ICO scam has been reported and the largest scam is said to raise around $660 million from 32,000 people. If you’re one to invest in ICOs, do your own research and verify as much as you can. They are one of the riskiest investments as there are just an idea and no product. Hence, one needs to be really smart for differentiating between the fake a real ICOs.
3. Pump and dump
Pump and dump is a technique where a group of people manipulates the price and volume of the coin to sell their holdings when the price is at the highest peak while leaving other investors holding the bag when the true value returns to normal levels.
The KeniCoin scam resembles the pump and dump scheme as the owners made the money by pumping the value of KNC tokens and selling it at a high profit on the open market and once they made enough of profits they left the market leaving their investors with worthless coins.
4. Email phishing
An email phishing is one of the most common digital scams where an authentic looking email is drafted and sent to the user in order to steal their personal information or to gain the access to their online data and accounts. The email phishing has affected the cryptocurrency scams and many people have been its victim.
5. Fake digital currencies
Certain cases were reported in which people sell fake digital currency by calling them and making attractive offers. A number of people losses thousands of dollars by falling in such preys of fake digital currencies. One must know that no real investors will cold-call to offer an opportunity if receive such calls for investment in project one must note the details, carry out proper research or should file a report.