Crypto Scams

What is a scam?

It’s normal to look at the marketing materials of new crypto startups. You’ll notice that a lot of these startups are raising money through venture capital firms and crowdfunding portals, which can be associated with established brands. You might also notice that founders who meet their fundraising goals will invest a percentage of their initial investment in a new cryptocurrency that will be released in the future.

While this concept isn’t inherently a bad thing, the term “blockchain company” or “digital currency company” means something different to everyone.

How do crypto startups scam you?

Here are some of the common scams that come up when you’re researching a crypto startup:

Crypto Stocks

As a new technology, cryptocurrency shares aren’t yet regulated or regulated by the SEC.

How to spot a crypto scam

A scam that is entirely fake and fraudulent will rarely take a traditional business approach to marketing. However, they still need to get their messages out, and that usually involves advertising. For cryptocurrency scammers, this means a barrage of advertisements on online publications, claiming that a new cryptocurrency is the next big thing. As deceptive as this can sound, some legitimate blockchain startups have even accepted advertisements on their websites.

Another scam involves fake social media pages that promise new cryptocurrencies. They may claim to be sponsored by the company, but in reality, they are managed by scammers. Some of these accounts even feature attractive models who will request that you provide your personal information to be provided in exchange for free coins.

The digital currency market

The US markets may be around in the background now, but the cryptocurrency space is only getting bigger. Over half of the world’s bitcoin wallets are located in Asia. Cryptocurrency exchanges can be accessed from a browser as well as with an app. Before diving into cryptocurrency, experts recommend investigating the blockchain assets themselves.

To find the perfect crypto, try the “benevolent dictator test” to see if the founder can really provide the protection you need. If the team is too small, there’s a chance it may be a scam. When you research a firm or even a virtual currency, look at the wallet address that the cryptocurrency will be sent to. This address should be linked to the bank account. Look for red flags.

Trading and investing

If you want to trade crypto, you’ll need to get your hands on a wallet that’s connected to the system, so it’s important to check that the startup you’re considering has licenses from state and federal governments to operate. Some of the largest exchanges for investing in crypto are run by US-based companies and are subject to government regulation and oversight.

There are also a number of Bitcoin investing firms that want to make you part of their circle of followers. These firms don’t have a fixed trading platform or live chat support, so they rely on social media, email, and phone conversations to be your only option for exchanging your money. Be wary of companies that don’t provide much clarity on how trading works.

And the whole process takes some time.

And what about altcoins?

Altcoins are cryptocurrencies that started in the era of bitcoin and since have sprung up. They’re usually the more esoteric versions of cryptocurrencies, and some altcoins exist just to have a certain flavor and use. Some are designed to make the buying process easier, while others are designed to be extremely secure. Here are some of the most common altcoins and their values:

• Namecoin (NMC) is a good example of an altcoin with an interesting use case: it’s a digital currency backed by the name of a certain person or company. The creator of Namecoin named himself the coin’s custodian and entrusted the NMC market to him to keep the market’s ownership separate from that of the core blockchain.

Conclusion

Cryptocurrency is gaining more and more popularity with young people all over the world. However, like all new technology, there are also risks. Learning how to protect yourself when deciding to get involved in the market is important for any investor.