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Different Types Of Cryptocurrency Scams You Need To Know About

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Cryptocurrency industry comes with its fair share of loopholes and this provides ample opportunities to scammers for duping people without adequate knowledge. The inherent structure of the crypto market makes keeping trace of a transaction a challenging task and this offers greater leverage to scammers. Today we are going to guide you through the apparent red flags of the cryptocurrency sector which can keep you cautious while trading through the risky crypto waters.

• Scammers commonly clone websites, wallets and apps of reputable companies for redirecting users towards a malicious payment gateway. Even the URL makes use of similar letters which resemble the original one such as 0 and O. Investors need to be cautious of the same and scan through the app colors as they do not match the original brand’s colors exactly. New wallets and apps pop up in the crypto sphere with every passing day but you should always stick to trusted platforms rather than proceeding with rampant download from the play store.
• Modern companies raise funds through Initial Coin Offerings or ICOs. Scammers often take advantage of this through fake ICOs which are marketed heavily although there is no strong foundation about its leadership or coin. A study conducted in 2017 marked 78% of all ICOs as fraud. Investors can keep themselves protected from such ICOs by scanning through its whitepaper which usually remains filled with mistakes. They should also go through its proof of concept and roadmap for the token.
• One of the biggest characteristics of Fake Pools is that they offer allotment of ICOs via discord, telegram and slack groups. They urge investors to send in funds for contributing to the pool and offer about a 5-10% surcharge on the present rate. You might be promised ICO tokens but they usually vanish once the fund transfer is completed. To avoid this, investors should engage in OTC transactions only with trusted people and use P2P exchanges for honoring those transactions.
• OneCoin is the most popular Ponzi scheme which encourages people to enter a pyramid by paying for a membership. The membership fee could only be traded in the exchange of the company which controlled trading volumes by restricting individual buy and sell. More than being a crypto business, it was actually a multi-level marketing scheme making empty promises to unsuspecting investors and defrauding them. Investors can keep themselves protected from the same by conducting a thorough background check on the company, scanning its past feedbacks and confirming the company’s legal status.
• Cloud mining is gaining a lot of popularity in modern times which is adding to the cost of electricity and mining equipment. Fraudsters might encourage novice investors to participate in fake mining activities and embezzle their funds as soon as it is transferred.

Conclusion

If you have already fallen prey to a crypto scam, or thinking about investing in a new crypto company and doing a background check, then you can seek out the service of Funds Recovery. Once the complaint is submitted, necessary data is collected by Funds Recovery for filing a case against the scamming portal and getting back the trader’s funds.