How Cryptocurrency Scams Work

How Cryptocurrency Scams Work
Millions of people globally investing in the cryptocurrency have been scammed vast sums of money. Multiple new Cryptocurrencies launch each month with numerous new coins and tons coming up as initial coin offerings. In 2019 investors lost billions of dollars in cryptocurrency-related crimes with the criminals using new-technology and old-fashioned tactics to swindle.
Cryptocurrency scams range from phishing, hacking, fraud, and digital theft. From cryptocurrency, cybercrime, and researching blockchain, some rely on Ponzi schemes to allure new participants into investing in Cryptocurrencies. Others use a sophisticated and highly automated process that includes automated software through the instant-messaging system, Telegram, and other popular social media platforms. The fraudsters lure people interested in Cryptocurrencies into investing millions of cash in fake returns promises using conventional and digitized methods. However, some cryptocurrency has legitimate plans, but fraudsters may still manipulate the pricing at the marketplace to suit their returns. So let's explore more on how cryptocurrency scams work in alluring unsuspecting investors
Sweet Talking Scammers
Some scammers use their natural gift of sweet-talking to allure investors into using their hard-earned money to invest in a Ponzi scheme. Such scammers use straight-up deception and lies to convince people to join their cryptocurrency. The founder of the scam cryptocurrency, known as OneCoin, used lies to defraud investors billions of cash. Also, the company applied the sweet-talking techniques convincing investors into buying a nonexistent cryptocurrency. The founder used impressive music, potential claims, and jargon of specialized knowledge to allure and swindled potential investors.
Other scammers take advantage of the price difference when exchanging various Cryptocurrencies to make huge profits. They apply the market arbitrage technique to buy cheaply and sell at enormous prices. Additionally, some scammers have opted to use Telegram social media platform bot to send their investors outrageous returns balances of their investing, alluring them to spend more and invite their friends hence forming a Ponzi scheme.
Fast-Talking Scammers
In the fast world, greed and love for the good life have created a space for scammers to use their fast-talking ideas to allure investors. Such Crypto scammers use their existing investors to lure more investors with the promise of high percentage return rates on each person who joins under their referral code. Additionally, the founders of such scams post pictures of a big mansion, high-end shopping, classic cars, and holiday in top destinations with others holding rolls of cash to entice investors.
Initial Coin Offering Scam
Some fraudsters also use the Initial coin offering to scam investors. The initial coin offering is potentially a legitimate investment opportunity that acts as a startup for most cryptocurrency companies to raise money. However, the fraudsters use an initial coin to scam investors by asking them to send active Cryptocurrencies like Ethereum and Bitcoin in exchange for a discount on the new crypto coins.
Many of the first coin offerings companies have turned into scammers with organizers engaging in different cunning plots like creating superior advertising materials and renting fake offices. More than 15% of the upcoming cryptocurrency have no idea about this new technology sector hence using plagiarized materials to attract and scam investors.
Investors looking to invest in the new technology environment of the cryptocurrency market should be aware of scammers using the above tactics to allure people. Thorough research should be done before investing in any cryptocurrency to avoid falling into the hands of scammers.