Cryptocurrencies and other blockchain assets are not subject to bank guarantees and other measures of “traditional” financial security. Investors need to make every effort to protect themselves. Therefore, we seek safe ways to exchange BTC to XMR online.
Criminals have come up with many ways to steal cryptocurrencies. They create fake exchanges, conduct failed ICOs in advance, and this is not the whole list. And we need to preserve our crypto and privacy.
Cryptocurrency market scams
The variety of crypto assets and the lack of strict regulation attract scammers of all calibers. So a crypto investor needs extreme care and a dose of healthy paranoia.
The most common scam schemes:
- Price manipulation: in the world of trading most scam often comes from the online brokers you have chosen. If you don’t choose a good broker, you may lose all your capital. This is a case of Forex trading scam in order to manipulate prices. In fact, many online brokers make small changes to the price. The goal is to show investors the best deals. The job is so well done that you will be quickly tempted by the services and the fees applied.
- Investing in Bitcoin with a “guaranteed” income: super-profitable investments through an “experienced manager”, “celebrity,” or “large well-known firm”, etc. Depending on the scheme, it happens that the first payment is stolen. But sometimes, they give you a little money, prompting you to invest more.
- Inflated profitability: investments in new promising coins or tokens. Another more effective trick to lure you into a copy-trading scam is numbers. The fact is that you will see huge numbers to the extent that you will be attracted. The token’s price is always growing, but it is impossible to cash out the investment afterwards. This is why you should not focus on one analysis criterion.
- Phishing: obtaining private keys from crypto wallets using deceptive schemes. Usually, for this purpose, scammers create a copy of a well-known crypto wallet or crypto exchange. Investors use real data from their crypto wallet, and all funds fall to scammers. Also, they may try to get private data by posing as employees of a particular company.
! Please note that the scammers monitor trends in the cryptocurrency market and create new schemes.!
- ICO Scam: scammers attract investors’ funds by promising to issue extremely promising tokens. After fundraising, they terminate the project or launch a platform that does not meet the original conditions and promises. The colossal ICO boom was in 2017-2018. According to a study by the American consulting company Satis Group, in 2018, more than 80% of all ICO projects were scams.
- Pump & Dump: a scheme of artificial appreciation (Pump) of cryptocurrency followed by a price collapse (Dump). With this scheme, scammers sell new unknown tokens, convincing them of an imminent sharp increase in their price. To raise the cryptocurrency exchange rate, the scheme organizers actively use advertising — specially created websites, Telegram channels. Tokens can also be associated with something popular, such as a TV series. After the excitement arises, the scammers wait for the asset price to rise due to high demand and then abruptly sell their tokens. As a result, the exchange rate collapses, and other holders of cryptocurrencies are left with depreciated assets.
Well-known examples of a scam in cryptocurrency
OneCoin is a pyramid scheme under the guise of implementing “training packages”, launched in 2014. OneCoin was positioned as a “digital currency based on cryptography”, an analog of bitcoin. At the same time, initially, only the organizing company itself could be engaged in mining. According to various estimates, from 4 to 15 billion euros were invested in the pyramid.
PRIZM is a project that promised a high passive income, while the project token was constantly depreciated. The technical documentation was hidden from users, and the source code was compiled from the codes of other projects.
LoopX, a project that appeared during the ICO boom in 2017, raised $4.5 million.
How to recognize a scammer
It is only sometimes possible to identify scammers even by professional market participants. Attackers disguise themselves well and carefully think through all the stages.
But there are a number of signs by which potentially dangerous projects can be identified:
the promise of large revenues
One of the main signs of scam projects is guarantees of high profitability.
In order for potential depositors to fulfill the requirements of scammers faster, the latter report that the high yield offer is limited in time and a decision must be made within hours or even minutes.
anonymity of the creator and the team
Crypto scammers prefer to act anonymously, so they do not disclose their real identities to users. Instead, they can use pseudonyms and pose as well-known experts in the crypto industry.
minimum amount of documentation
The minimum amount of technical information about the project can be indicated on the scam. Any really promising project will have a significant amount of documents, and an audit should be conducted in the case of an ICO. The scam usually does not have such a volume of documents, and the documentation itself is scattered and of poor quality.
suspicious activity on social networks
The accounts of the scam project in social networks are usually easy to identify. The publication feeds will consist of advertising and frank promotion of the project itself. Detailed information on the project on them is likely to need to be included.
To avoid scamming trading, there are many reliable online brokers and online exchangers. They offer better services and have a large community. For example, Quickex allows you to exchange cryptocurrencies and check the market value of currency pairs. Change BTC to XMR or vice versa at a fair rate without any delay.