Crypto Academy Season 3// Week 5// Homework Post For [@yohan2on]-Crypto Scams

Hello crypto enthusiasts

Introduction

About Crypto Scams

Crypto currencies have been in existence for about 13 years now, since the emergence of bitcoin . It started to gain popularity when the price of BTC started surging higher. There are over 10, 000 coins in the system. Some are genuine, whilst others are fraud projects which are created to defraud investors. Crypto Scams come in different forms depending on the fraudster's target. I can simply define crypto scams as illegal activities in the crypto space that intend to defraud people or that have zero benefit to the investor. They only benefit the fraudster. As soon as crypto started to gain public attention, fraudsters started to use it as an opportunity to defraud potential investors who were ready to invest in it.Because of those activities by the fraudsters, people with no knowledge of the work flow of cryptocurrencies simply labeled all cryptocurrencies as scams. My personal encounter with a crypto scam occurred in April. I was totally new to the crypto world. An unknown person messaged me on my Telegram account that he was buying some altcoins with ETH. In an attempt to sell my coin to him, I told him to send me the ETH first. I realized he sent the ETH testnet instead of the mainnet. Assuming I did not take my time, I could have just sold the coin to him for the testnet like that. I then realized he was trying to defraud me. That is when I started to learn seriously about crypto currencies.

Some Forms Of Crypto Scams

Crypto scams come in different forms. Below are some of the ways fraudsters defraud people with regards to crypto currencies:

Ponzi Schemes: People can create fake wallets for fake crypto trades to take clients' assets.
Pump and Dump Schemes: Owners of some of the scam coins artificially attempt to drive the price of the coin up prior to selling it in order to acquire huge profits.
Monetary Crimes: Some of the properties of most crypto assets make people label them as tools for the assistance of duty evasion, bribery and illegal tax avoidance.
Initial Coin Offerings (ICOs): This is the first offering of any crypto asset for sale in the crypto market, which fraudsters usually utilize as a method for defrauding those who are illitrate about cryptocurencies. Most of these ICOs turn out to be false without proper whitepapers about the project.
Market Manipulation: People can intend to manipulate the prices of their favourite coins for their own selfish gains.
Deceitful Promotors:In order to lure investors into some of the crypto investments, people, usually celebrities, can falsefully promote their coins.

Crypto Scam Project

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This part of my presentation is about My Big Coin (MBC), Through my findings, My Big Coin is one of the most notorious crypto scams. My findings are about the founder, the false claims of the project, and how it ended.

My Big Coin Inc.

Founder of My Big Coin Inc.

Before I write about MBC, we have to know the man behind the project. That is why I have done some research about him. Randall Crater is about 50 years old and from East Hampton in New York . Through his LinkedIn profile, he has been a developer and owner of GreyShore Software systems since 2008 Source. Crater was behind the operations of the MBC project. He was later charged and arrested with his peers. After the MBC project was exposed as a scam project,

My Big Coin's Claims and how it ended

This is one of the most notorious crypto scams to have occurred. it was a Ponzi scheme, It started in 2014. Carter, the founder, and his team mates came up with this project. They sold the so called coin to investors through false claims, but later lured their investments worth $6Million, which landed them in a court charge.
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Some Of The Claims of My Big Coin

1. They claimed the project (My Bigcoin) was backed by valuable assets. Typically, gold.
2. The investors of MBC were lied to that the coin could readily be used to purchase goods through their credit cards.
3. They further claimed that big coin investors could make purchases through the use of master cards.
   All the claims about my bitcoin turned futile when they were exposed by the US Commodity Future Trading Commission sourcein 2018 as a commodity fraud. They were sued and, upon investigations by famous US government agencies such as, FBI, US Postal inspections, Justice Department, and others, Crater and his colleagues were charged with being involved in commodity fraud and money laundering for siphoning investors' money worth $6Millon, which was paid by the investors to buy the fake cryptocurrency.

Sources and proofs of my findings about My Big Coin Scam project

US government files charges for $6 million My Big Coin cryptocurrency Ponzi scheme

U.S. charges My Big Coin virtual currency firm founder with fraud

Big Coin Case Is Big Problem For Cryptocurrency

CFTC Sues Obscure Crypto Scheme ‘My Big Coin’ for Fraud

Effects of Crypto Scams on Cryptocurrencies development

The effects of crypto scams on the crypto space can not be underrated. It has impacted negatively on the development of cryptocurrencies. People have lost interest in investing in cryptocurrencies. Meanwhile, cryptocurrencies were developed to foster decentralization and security in both online and offline monetary activities, but due to the get rich quick nature of fraudsters, both individuals and governments have lost interest in investing their assets in cryptocurrencies. People who have not studied more about the development of cryptocurrencies have just classified all activities of Crypto as scams, which shouldn't have been the case.
Moreover, individuals who have lost their assets in crypto scam projects have lost their assets. With regards to the Big Coin project, investors lost their money worth $6Million. Most of them have lost interest in investing in cryptocurrencies since then

The need for crypto regulations

Despite the fact that regulations can influence crypto exchanging values, appropriate measures can balance out the market in the long run. This sets out better open doors for more secure ventures that will bring more investors into the market. Additionally, regulations would have the option to bring down bogus characters managing in illegal trades. Considering regulations on Cryptocurrency probably won't feel great to certain crypto lovers, yet it should be regulated. People are reluctant to enter into cryptocurrencies on the grounds that its not regulated. After regulations, it will turn out to be substantially more dependable and secure for users . Despite the fact that individuals use cryptos for exchanging those exchanges consistently relate back to legal tender. In this way, while Governments ought to regulate the cryptos to the degree there is some plan of action to illegal activities. While Governments ought to regulate the cryptos to the degree there is some response to illegal activities like fraud, I don't think any government, under normal circumstances, ought to ,at any point authoritatively perceive a secretly made crypto in any legitimate sense as a type of "money". In the long run, it is great. It will win the trust of individuals with doubts about cryptocurrencies.

Conclusion

I have gained knowledge through my research in coming up with this assignment. Thanks to the professor for this. It is a must learn for every new comer in the crypto space. I encourage anyone with an interest in investing in cryptocurrencies to have at least basic knowledge of the development of cryptocurrencies in order not to fall prey to fraudsters.

cc;
@yohan2on