Crypto Academy / Season 3 / Week 6 - Homework Post for @yohan2on || Scams in The Crypto Space
Thank you @yohan20n, for your lecture on cryptocurrency scams. Scammers have caused a lot of pain to their victims in recent times. It is important to understand who they are by studying how they operate, in order to avoid falling victim to them.
These are a set of ways developed by fraudulent people to rob people of their investment in cryptocurrency. It is rampant as the crypto space opens up with new adopters coming in. Their target is the new people in the industry, knowing that they have little or no knowledge of how the crypto space works.
Among the ways they operate are:
1.High-ranking promises of instant and huge profits for investing in their assets. At times, it might be the promise of a higher price to sell your asset to them. Usually, the prices they offer are higher than the current market price. For example, someone who wants to buy your Steem at the rate of $1/Steem is likely a scammer. If you send it, it will disappear.
A few months ago, a lady was scammed of her $10,000 worth of BTC, simply because the scammer offered 507Naira/$ against the 500 Naira/$. It happened on a Whatsapp chat.
2.They offer big returns on investment. You will hear things like ‘’invest $50 and get $100 in 24 hours. They utilize email and social media platforms to send messages to people.
3.They promise free money. Here, they try to steal your sensitive details in exchange for free money. This is different from airdrops, where you don’t need to give out your password or other exchange login details.
4.Lastly, they don’t give a substantial explanation to their products or the use case of their assets. Please beware of these shady deals.
On 6th July 2021, the self-acclaimed Bitcoin King, Claudio Olivier was arrested for the missing of a whooping 7,000
BTC as a result of his involvement in deals which led to a loss of over $5 billion of investors' money. The arrest was carried out by the Brazilian Federal police, followed by a charge of the suspect to court.
Bitcoin Banco Group is a BTC brokerage platform in Brazil, which Olivier served as the president. The firm has been under investigation since 2019 after they claimed to have lost 7,000 BTC of investors’ funds to a hack on their platform.
It is on record that the firm lured investors with promises of huge daily returns of investment, after which they claimed their platform was hacked after people had invested their money.
This is a typical scam that fits the above description of how they operate.
The negative effects of scams can never be overemphasized. The emergence of scam projects in the past has made some potential investors lost interest in crypto.
People get depressed after being scammed of their investments. Some have lost their life savings to scammers in the crypto space and that is a bad name to new coming projects.
The numerous pump and dump projects have deprived people of their money, as such this has reduced crypto adoption to some extent. Imagine a new investor getting scammed as a result of investing in an ICO (initial coin offering), only to wake up the next day to realize that it was a scam project and his money is gone. It would become almost impossible for him to invest in crypto again.
People have committed suicide after being scammed of all their money in the crypto space. Some families have gone bankrupt because of scams in the crypto space.
Crypto scams only have negative effects, as such, we should do due diligence on any project before investing to avoid falling victim to scammers.
I believe some regulations can add value to the crypto space. For example, if every project is audited and the owners are made to stake some money before being allowed to go mainstream, the rate of scam projects will reduce.
These regulations can be done by the government or designated bodies like Certik.
As the rate of adoption and creation of new tokens increases, every project should be scrutinized to reduce the rate of scams in the industry.
The crypto space is very risky. Anyone who chooses to be part, either by trading or investing, should investigate the intended project properly. All investments are at the investor’s risk. As such, nobody should be convinced to invest in what he is not sure of.
Let’s try to prevent another scammer from stealing our money. To do so, we must be on the lookout. Look twice before you leap.
Thank you for reading.
Hi @greatness96
Thanks for participating in the Steemit Crypto Academy
Feedback
This is good content. Well done with your research study on the plague of Crypto scams.
Thank you very much, prof.