The list of scams in the crypto space keeps growing…
So here’s a list of 10 ways people lose money to cryptocurrency fraud (and how to avoid them)
GUARANTEED RETURNS 🔗
One of the easiest ways to spot a ponzi scam is looking for promises of guaranteed high returns with little or no risk.
Look out for ads like “Earn 15% a month, guaranteed!”
If an investment sounds too good to be true, it probably is.
OUTBOUND MARKETING 🔗
Be wary of unsolicited offers or requests for investment.
Scammers may try to reach out to you through social media DM’s, email, or even over the phone.
Impersonators will copy a public figure’s profile to gain trust, then use their reputation to scam.
TRADE FOR YOU 🔗
Anyone reaching out claiming they can “double your bitcoin” by trading for you is a scammer.
Whatever crypto you send them is gone forever.
ANONYMOUS TEAMS 🔗
Look for red flags such as a lack of information about the team behind the project.
We’ve seen some high-profile exit scams with fake founders.
PAID INFLUENCERS 🔗
Be skeptical if you see a celebrity or crypto influencer pumping a coin.
Low-quality projects use celebrities as a way to gain trust and get people to invest.
Kim Kardashian, DJ Khaled, and countless crypto “influencers” have been sued for promoting scams.
PHISHING SCAMS 🔗
From email and social media links to phone calls, watch out for anything that asks you to provide login details, personal information (e.g. social security or passport number).
Scammers will try to login to your accounts and drain your crypto.
COPYCAT COINS 🔗
Avoid investing in any cryptocurrency that claims to be a “new and improved” version of an existing cryptocurrency.
Countless “Bitcoin 2.0” projects have come and gone.
NARCISSISTIC CULT LEADERS 🔗
Watch out for any founder that tries to silence critics, uses ad hominem attacks, and claims to be your savior.
These wolves in sheep’s clothing fall the hardest… over and over gain.
PUMP & DUMPS 🔗
“Pump groups” manipulate the price of a cryptocurrency by:
- Buying a large stake in an illiquid coin
- Spreading BS bullish information to suck in sheep buyers
- Sell as the sheep drive prices up, leaving unsuspecting investors holding the bag.
CLOUD MINING SCAMS 🔗
These scams promise high returns from mining cryptocurrencies without you needing to buy mining software, but in reality, they are just taking investors’ money without actually mining anything.
The list of crypto scams is longer than this tweet thread, but I hope you found this helpful.
What other crypto scams should people watch out for?
Give this thread a like and a retweet if you think it can help new crypto investors!