Uncovering Crypto Scams

Why people get scammed on Crypto.

A Common Occurrence In The Crypto World

Scammers pray on the greedy. Be vigilant and don’t believe the hype.

High APY’s

9 times out of 10 (maybe 9.9) a token that has a stupidly high APY has been designed/marketed to lure in retail investors. This is because it’s essentially a Ponzi scheme.

For those that aren’t aware what a Ponzi scheme is, Google defines it as;

“A form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.”

The aim of these tokens is to make retail investors (you and me) in to believing that they can make a quick buck. They pray on people who believe crypto creates easy money fast, so they make it out that you can earn huge interest on investments.

In reality these tokens have already been divided out to the token creators and their friends, once the price of the token sky rockets due to its clever marketing which brings in new investors the price plummets because the creator and co have sold their tokens. Leaving us mere mortals to pick up the pieces, hodl and hope the price comes back up (it never does.)

You Give Me ‘X’ Amount & I’ll Give You ‘Y’ Back

In the real world, if a complete stranger came up to you and said, “if you give me $100, I’ll give you $200 back”.

You would think it’s a scam. No doubt about it.

For some reason however, people keep falling for this. If you send 1,000 tokens to this wallet, you’ll receive 2,000 tokens back within 24hrs. Guess what. You’ll never receive these tokens.

Maybe it’s the lack of knowledge about cryptocurrency. Maybe it’s greed or curiosity. However, this is a scam that’s been used daily. On platforms such as Twitter, YouTube and more.

Do not fall for it.

Rug Pulls

Harder to tell initially but a daily occurrence none the less. Rug Pulls are when a crypto coin/token/NFT is released, sold and then you hear nothing from the developer, social media goes cold and everyone is left in the dark.

Unfortunately a rug pull can be very difficult to determine (I’ve fell for a few of them). There isn’t much you can do and again you’re left trying to decide whether to cut your losses or hold out and see if they return.

Most of the time this is done because a developer has made their money with the initial sale and they can’t be bothered to carry on with the work, or they over promised on the utility, or just blatantly lied about their abilities and is making a quick escape.

The only way to avoid a rug pull is to not invest in anything that looks sketchy, has no obvious team, looks too good to be true or doesn’t show to be engaging with followers.

Photo by Kanchanara on Unsplash

Be Vigilant With Your Money / Crypto

The world of Crypto is still fairly new, there are no rules or regulations so people can and are doing whatever they want in the hopes of not getting caught.

Try to remember that nothing in this world comes free. If something seems too good to be true be careful and do your research.

Although it is possible to make money in cryptocurrency it’s not often done within a matter of days or weeks.

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