Cryptocurrencies are now mainstream. However, with their increased popularity and a higher level of investor participation, they have also become preferred platforms for fraudsters who want to exploit individuals and make quick money. In fact, there have been over 80,000 scams in 2020 alone. Scams are not uncommon in the financial industry, whether it is banking, insurance, or investments. Those victimized by these schemes are often unaware and usually give in due to the fear of potentially missing out on lucrative opportunities.
If you do not want to be a victim and lose money to crypto scams, you must do your due diligence before committing to any investments, no matter how enticing they appear to be. Taking the time to research will allow you to gain more insight on potential frauds. For example, reading about the bitconnect scam info will show you more information on how scams work and allow you to steer clear of them. And do not forget to look out for the following red flags listed below.
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Unrealistic claims and promises
Exaggerated claims of high returns with minimal risk are one of the most common indicators of a scam, especially when determining the legitimacy of cryptocurrencies. It’s normal for scammers to tempt naive investors using promises of sizable profits. Even those that may have generated positive ROIs before may not do so again because of their volatile nature. Always remember that there’s a risk in any investment, and crypto is not an exception. Anyone who says otherwise either doesn’t know what they’re talking about or is trying to fool you out of your money.
Sudden price spurts
Another red flag to look out for are options that begin to show sudden price increases despite lacking any successful track record. One example is the cryptocurrency known as the Squid Game. Its purpose was to take advantage of the show it was named after, driving its value up. However, in the end, it lost its worth when it was finally revealed to be nothing more than a mere scam.
Validation requests via coins
Most scammers will promise crypto giveaways where they request potential investors to send some coins for the purpose of validation or to avail offers. However, even if the amount asked for is small, you mustn’t send it, regardless of how promising the opportunity looks. These individuals tend to trick many users, collecting themselves a respectable amount of coins in the process.
Dubious social media activities
Last but not least, you need to be wary of dubious social media activities from well-known personalities. One of the techniques that fraudsters use is hacking the handles of politicians and celebrities and using their accounts to post fake testimonials to entice people to make an investment. The good news is that you can determine whether or not these handles are from impostors by doing a little research on the sellers’ backgrounds.
Final thoughts
No one can deny the profit potential cryptocurrency investments hold in today’s digital age. However, not all are legitimate. And if you don’t want to lose money from a scam, you must first determine that it’s genuine. With the above mentioned red flags, you’ll be able to tell those that you should avoid.
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