Steemit Crypto Academy | Crypto Scams and How to Avoid Them | Homework task for @yohan2on

On this occasion, I will try to take a class at Steemit Crypto Academy. I am interested in joining this class because there are many new lessons that I will get here. I will do homework task from professor @yohan2on. Lesson discussion about Crypto Scams and How to Avoid Them. Lets try...

What are Crypto Scams?

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Crypto scams are crimes committed by some people or groups to get large personal gains that are detrimental to many investors in the crypto world. Since the presence of crypto in the financial industry has given good progress and development, scams also continue to follow and cannot be handled. There are those who want to worsen the image and crypto system that is currently increasingly known and used by many people in the world. Scams are actions that investors should prevent and avoid so prudence is very influential in crypto investments.

Investors who have been in the crypto world for a long time must have had a lot of experience in identifying and overcoming scams. In this case, a good understanding and analysis of a crypto asset or project is needed in order to get good results and trust as well. Scams are vulnerable to investors who are new to the crypto world because they are not experienced enough and are easily attracted to the big profits that will be given by those who do scams in a fast and easy way. This is a very detrimental thing if you get caught up in it.

Ponzi schemes are one of the most dangerous and ubiquitous scams. This is a scam crypto investment with the lure of huge profits from attracting new investors. The system of this scheme is not known by investors, they think profits are obtained from the results of business and other work. Whereas the source of profit is obtained from new investors who participate in the investment. But when the investment money has been collected in large amounts, this project will disappear.

Scams are carried out in various ways and methods. There are many methods that can involve investors and scammers in the crypto world. Sometimes the scam party does not have a clear, fake, and anonymous identity to make it not easy to track and find. This is a factor that investors should pay attention to before investing. Some scam methods that have occurred in general are as follows:

• Exchange Scam
  Many scams occur on fake exchanges created by scam parties relying on cheaper crypto coin prices. Many investors are deceived and attracted by lower market and transaction prices than other trusted exchanges. They will get the data and can steal your crypto assets at any time. Choosing an exchange that has a reputation is very influential so you don't get caught in a scam.

• Website Scam
  Many scams run on fake websites that are made to look like real websites. They can find your information and data as an investor, allowing them to access and hack the system that is running. This will make you lose crypto assets. Here caution and checking the website is very necessary in order to maintain the security of your account and crypto assets.

• Airdrop Scam
  Many scams create fake Airdrop activities that make investors lose. With the lure of getting crypto assets as prizes, they can get your information and data that can be used as access for crime. Here the level of truth and reputation of the Airdrop activity is very influential. The expected information must be clear, valid, and reliable. Fundamental analysis of the Airdrop is necessary before following it.

• Cloud Mining Scam
  Many scams rely on cloud mining in terms of profiting from investors by providing expensive equipment and tools. Cloud mining is believed to be able to provide large profits in a certain period of time after giving capital. Profits can also be obtained if you invite other investors to join. But they can access your wallet at any time. The involvement of third parties carries a high risk and is often a scam in the crypto world.

• Email Scam
  Many scams occur via email to investors by providing a link for direct access to trading and investing in certain crypto assets. This is a risky action and allows scammers to get your information and data by simply clicking the wrong link. A good and reliable investigation and reading of emails is very necessary to avoid and prevent losses.

Crypto Scams Projects

1. Thodex
   
   

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   Scam has occurred on the Thodex exchange platform which is a Turkish crypto exchange and trading platform. The volume and circulation of crypto on this exchange is known to be huge on a daily basis. But one day many users could not access this exchange. The CEO of Thodex is rumored to have disappeared and carried off a large amount of investor money. The police are still investigating and looking for a bright spot for this case. Many investors have experienced losses. Choosing a platform that has high trust and reputation is very important.

2. One Coin
   
   

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   This scam was perpetrated by Ruja Ignatova. He made a statement and provided information about One Coin being wanted to be a rival to Bitcoin. He managed to convince and attract many investors to invest in this coin. There are so many investors who invest up to billions of dollars. From the investment results of many investors, she became a rich woman who traveled the world and often bought expensive properties. He also threw a lavish party. But after two years this woman disappeared and could not be contacted. Some opinions suggest that Ruja Ignatova has been killed or kidnapped. Prudence in choosing and determining crypto investments is very important.

3. Freecoinhunt
   
   

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   Airdrop scam has also happened is the FCH token. The FCH token is issued and popularized by the site Freecoinhunt.com. They shared various information about Airdrop in 2019. They made easy requirements, where participants were only directed to become members and complete other files. Participants are notified that they will get a certain number of FCH tokens, but they are temporarily frozen in their respective accounts. But the scam happened a few months later. The site is no longer accessible and all participants are deprived of FCH tokens. Analyzing and understanding crypto investments is very important.

To what extent have Crypto scams affected the Crypto space?

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In my opinion, scams in the crypto world have deteriorated the image and system that makes people have to be careful in carrying out good investments. This scam has had a negative impact where many investors have suffered losses. Scams have affected all sectors in the crypto world such as markets, authorities, investors, risks, prices, coins, projects, and others. Most notably the scams have affected the crypto space as follows:

• Regulation
  Scams have affected systems in the crypto world that have evolved in terms of security. Regulations have been tightened and are at a high level to prevent and minimize scams. the involvement of responsible parties such as the Securities and Exchange Commission (SEC), Commodities and Futures Trading Commission (CFTC), Currency Comptroller (OCC) have stepped in and taken part in the crypto world. Regulations referring to KYC & AML laws have also been implemented.

• Market Psychology
  Scams has affected market psychology in terms of reduced trading volume, circulating supply, and liquidity of certain crypto assets. This can make the development of crypto slow and experience a decline in various sectors. The scam has also made investors lose confidence and are afraid to invest in new cryptos that are about to be launched. In this case, ICO and IDO activities will have difficulty getting investors.

• Market Trends
  Scams has affected the market trend to be in a bearish or downtrend phase which may occur for a long time. This of course will have a negative impact on investors to get big profits. The bearish or downtrend phase actually has its own advantages for some investors, but if this phase does not change and the market reversal does not occur, then some investors will experience losses.

• Triggering Other Scams
  Scams has affected many parties in the crypto world. In this case, the scam can trigger other parties to scam at different places and times. Most people would be jealous of the success of a scam that manages to make huge profits. This of course will attract other people to scam and commit criminal acts. This is done purely for personal gain. Crypto will be targeted and make investing here even more risky.

• Investment Risk
  Scams have made crypto investment risks higher. In this case, investors must be prepared to accept the high risk of investment that brings profit. Here analysis, understanding, reading, and investigation of a project and crypto plays an important and much needed role to minimize the risk of investing against scams.

Will regulations in Crypto add value to the Crypto space?

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As time goes by, the crypto world continues to grow and many new innovations come in that make crypto even better. These regulations have had a positive impact and have an important role in the crypto space. This regulation has made the level of security in the crypto world even higher. The importance of security in terms of safeguarding information, data, assets, and matters relating to investors or users has made many parties feel comfortable and safe in investing and carrying out the transaction process.

The involvement of a number of very influential federal agencies that makes crypto more advanced and quality. In this case the regulation and involvement of several important parties such as the Securities and Exchange Commission (SEC), Commodity and Futures Trading Commission (CFTC), Comptroller of the Currency (COC), Federal Trade Commission (FTC), Financial The Crimes Enforcement Network (FinCEN), Internal Revenue Service (IRS) has taken part and stepped in to prevent and minimize scams or other abuse.

It has a very good aim of managing crypto systems and markets to be more valuable. Every investor and user expects positive things in the form of profit. All needs and transactions in the financial industry can also be accessed and executed easily and quickly. This will all run smoothly and according to procedures with regulations in the crypto world. It is hoped that the regulations will be carried out and executed properly so that scams will not occur or can be dealt with firmly according to applicable regulations.

The addition of regulations in the crypto space has made some sectors of the crypto world better off. This includes security, systems, markets, investments, users, projects, platforms, exchanges, transactions, processes, business, and all things related to cryptocurrency. This is certainly expected to make cryptocurrency more developed and advanced.

Conclusion

Scams are criminal acts that can harm investors and users in the cryptocurrency world. Some scam methods run by irresponsible parties must be understood and anticipated so as not to be trapped. Experience and analysis of this is very necessary to avoid losses in the form of assets or money. The scam has affected various sectors and has had a negative impact on the cryptocurrency world. However, scams can be minimized and prevented with regulations in the cryptocurrency world. Regulation has added positive value in the cryptocurrency space and made cryptocurrency even better.