Cryptocurrency is now seizing all the media attention and becoming the mainstream investment. It has drastically changed the entire image of the financial market. Over time, the number of investors in this market has increased. On December 3 there were 8711 cryptocurrencies in the $2.61 trillion crypto market. But due to some scams, investors experienced a fall in the market.
For example, recently The Squid Game token inspired the popular Netflix show turned out to be a scam. It crashed a couple of days after the launch. However, there are red flags in cryptocurrency. Before any investment, the investors should go through well-done research from a reliable source and do the investment. Frauds are common in the entire financial industry, from banking to insurance and investments.
So before doing the investment, let’s figure out the scams.
6 major scams are here that an investor should be aware of -
1. The sudden burst in the prices:
Crypto coins without any track records are one of the reasons you should never fall for them. As told before, The Squid Game was trading at one cent and the other week it was over $2856. It was a big scam and a lot of people had a big loss at it. So, taking the experience from here, consider all the crypto coins like this a scam.
2. Unrealistic promises:
It is another big red flag for the investors. All the crypto coins that promise huge returns tend to be false. It is a tactic for attracting buyers. Some cryptocurrencies have records of returning huge amounts but still, they don’t promise any particular return. From this, you can recognize a reliable cryptocurrency and a fake one.
3. Beware of hacks:
Whenever an investor trades in crypto, they get access to the crypto wallet. It comes in two forms, digital and physical, along with that it has individual keys too. It is not very different from your bank account. So there are a lot of possibilities of theft and hacks. Just like any other credit card number, do not share the key with anyone. It is as confidential as any other bank details. You might receive a lot of suspicious messages but do not trust them.
4. Validation requests through coins:
Mostly the fake cryptocurrencies make promises of giveaways, where they ask the investors for a few coins for validation. But as an investor, you should not give anyone even one coin. Scammers try to manipulate them, so they could collect crypto coins from different investors. Along with the giveaways, they also offer huge prizes to attract more numbers of investors.
5. Track the creators:
It is essential to know as much as possible about the creators that you are buying the crypto coin. If there is not enough information or social media sites available then it is better to avoid these kinds of creators. It is a cause for concern if the creators are anonymous.
6. Rug pull:
A rug pull is a kind of crypto scam that the developers leave in the middle of a project but they don’t stop the fundraising. All the people who don’t do research properly; often get scammed like this and ultimately make a big loss.
There are much more scams that an investor can experience, but these are the majors. If you be aware of these then you can save yourself from a lot of loss. Just because crypto has turned out so prosperous that’s why all the frauds are happening. So, if you are ready to invest in crypto, then keep these few things in mind before buying any coin. Talk to an expert for a better outcome!
