If you're new to the world of cryptocurrency, then it's important to understand how cryptocurrencies work in order to ensure you're not being scammed by fake promises of easy money. Cryptocurrency is here to stay, and while there are plenty of legitimate use cases for the technology, there are also plenty of scammers out there who are looking to take advantage of naive investors. That's why it's crucial to be aware of the signs of a crypto scam recovery scam, so that you can protect yourself from being cheated. In this article, we'll discuss some of the most prominent red flags that you need to be on the lookout for, so that you can avoid getting scammed by cryptocurrency con artists. Let's get started. Shady Promises Of Easy Money One of the most prominent scams within the cryptocurrency space is the Shady Promises Of Easy Money scam. Essentially, this is a con artist posing as a cryptocurrency project founder, billionaire, or renowned economist, promising investors easy money with no work needed. They might even throw in a token at low-cost to sweeten the deal. These so-called ‘investors' are often lured in by grandiose promises of easy money, and it usually doesn't take long before they're offered money to carry out simple tasks (such as managing a portfolio of stocks or investing in cryptos). The key to avoiding this type of scam is by being aware of the stories behind the pitches. If you see a project promising investors high returns without any risk, you should probably approach it with a healthy dose of skepticism. Even if the project seems legitimate, there's usually a lot more to it than meets the eye. Most often, these scams are operated in a ‘pyramid scheme' fashion, where the con artist offers money to the person at the top of the chain in order to entice them into doing their dirty work. Once that person is in, the scammer then recruits a second person to join (often times a friend or family member who doesn't fully understand the concept of cryptocurrency), and so on, down the line. The whole operation is designed to appear as legitimate as possible, and while it might seem impossible to detect a scam when contacting the alleged project creator directly, you should always be wary of giving out your personal information (such as bank accounts and social security numbers) to strangers. Never, ever do this online. Always remember: if it sounds too good to be true, it probably is. Over-hyped, Over-Saturated And Unfairly Portrayed In The Media Another red flag that you need to be on the lookout for is overly hyped cryptocurrencies and ICOs that are either over-saturated or unfairly portrayed in the media. For example, let's say you see a popular story making the rounds featuring the “Top 5 Cryptocurrencies For 2019” list. If you've never heard of Bitcoin, Dogecoin, or Ethereum, then you might assume that the author has adequately researched the subject, and that his list is probably based on objective criteria. Unfortunately, this might not always be the case. Often times, these lists are just a way for crypto scammers to get a leg up on the competition, and there's absolutely nothing wrong with that. However, if that's all you see, then it might be a good idea to look for an alternative list. In the example above, if you see that one of the cryptocurrencies featured on the list has also been featured in countless fake “investment guru's” fake cryptocurrency portfolios, you should probably assume that the list is probably somewhat skewed, if not completely made up. No Credibility In Terms Of Regulation, Education, Or Experience Another important factor to consider when detecting a crypto scam is the credibility of the project in terms of regulation, education, and experience. If a project doesn't have the appropriate regulatory clearances in place, as well as a team of people with industry experience, then it probably isn't a good idea to invest in it. On the other hand, if the project has all of these things, then it usually means that it is, in fact, a good idea to invest in it. The key is to determine whether or not the people behind the project are actually equipped to handle the responsibilities that come with operating a business in the crypto space. One way to do this is by looking at the team's profiles on social media. For example, if you see that a project is entirely run by students who have never worked in the industry, then it might be a good idea to approach it with caution. Even if the students happen to be incredibly intelligent and seem like they have what it takes, it often doesn't hurt to ask a few questions. When pitching a crypto scam, a good con artist will usually have some form of registration or licensing with the Securities and Exchange Commission (SEC) in order to legally operate within the United States. Unfortunately, many cryptocurrency startups don't bother with this, and as a result, they suffer from a lack of credibility, especially when dealing with investors outside of the country. If a United States regulator were to scrutinize a project, and determine that it was operating without the necessary registration, then it could end up being shut down. This is why it's crucial to do your due diligence before investing. Avoiding Phone Scams Another way to protect yourself from getting scammed by cryptocurrency con artists is to avoid phone scams. These are often times initiated by a con artist posing as an investor, CEO, or other business entity, claiming that they're calling from outside the country and need to verify some information about your credit card for security purposes. It's important to remember that these scams originate outside of the country, and it might be difficult for the authorities to track them down. Even if you confirm that you don't need credit card security, it might still be a good idea to decline the call. It's also important to note that these scams usually require that you give them some form of personal information, which they can then use to steal money from you. Instead of getting scammed, it's better to be safe than sorry. Avoiding Online Scams Just as a safety precaution, it is also wise to avoid online scams. These scams often operate through social media, email, and online forums, where users are promised quick returns on their investments. Sometimes these scams are set up as a Ponzi scheme, where older members of the scheme recruit new members, who in turn are promised big returns for their participation. Often times these scams will ask for details of your social security number, banking information, or credit cards. Once they have this information, they can use it to steal your money. Instead of getting scammed, it's better to be safe than sorry. Protecting Yourself From Theft Finally, it's important to remember that even though cryptocurrencies and their associated technologies are here to stay, this doesn't mean that all scammers will be stopped by it. After all, the world is still a place where plenty of people try to trick others for financial gain, and where black market places like the dark web continue to flourish. For this reason, it is still necessary to be careful who you're doing business with, and it's important to read the small print before signing up to any cryptocurrency or Initial Coin Offering (ICO) deal. If you see something that seems too good to be true, it probably is.
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