One of the things you will likely come across on your journey through the world of crypto is scams.
The main goal of this page is to help you avoid them by listing as many of them as possible.
NOTE: There may be others.
HYIPs (High Yield Investment Programs)
I’ve invested in one of these (I won’t name any names), just to make sure it was a scam.
Guess what? It was, and I may as well make a blanket statement that ALL of them are.
It is possible to make your money back, you may even make a hell of a profit (if you’re lucky), but at what cost? The majority of HYIPs end up closing once they reach a certain point by pulling the plug, and running away with people’s hard earned coins. Yeah, you can make a nice return by referring people to the program and earning off of their invested capital too, but do you really want that on your conscience?
This video by a guy on YouTube explains exactly how they are set up and also shows you what to look for before investing.
Please do not use the guy’s advice to create your own, but look for the clues he lays out for you:
UK Registered business? So what, you can set one up for peanuts. (This can also be done for many other countries! So be warned).
Check the Who.is records for the domain name, and if the business is registered, try to find out where the business is said to be located. One of the ones I checked out had a nice looking address in London, but when you search for that address on your favourite search engine, guess what comes up? One of those places that sells registered business for £89 a time.
Okay, gambling isn’t strictly a scam, but when the price of many coins continues to go up, why would you want to risk losing any of that coin on games of chance?
You could say investing in any crypto currencies is somewhat of a gamble, but why increase your risks of losing your investment two-fold by trying to win more, when you could end up losing it all?
There was a recent case where people lost a lot of money using the currency exchanging platform known as ShapeShift. This was through no fault of ShapeShift themselves, what had happened was someone had created a clone of their website and used the similar domain name ShapeShit.io. To the untrained eye, it would have looked exactly the same as regular site, but with one major difference; all the funds sent to ShapeShit.io were stolen.
ICO scams are also something you need to be wary of.
If you see a new token sale that sounds amazing and you decide you want 10btc or 100eth worth of this new super duper crypto? Be careful!
No, not all ICOs are scams, but some of them are, and that is why you need to do your research before investing.
How do you spot an ICO scam?
- Follow similar due diligence that you would in regards to HYIPs. If anything seems “shady” you could be looking at a scam.
- Check on forums, and also places like steemit for articles relating to the ICO you’re interested in. Look for well balanced articles and not ones that appear to be one sided or “shill” articles.