Crypto scams all beginners should be aware of

[joulion86]

Hi,
the crypto scene is full of users trying to scam you out of your hard earned life savings. If you use your brain and a little common sense, very little can happen to you. Still, as most people (me included) do make some mistakes in life, I would like to share this compiled list of scams with you to raise awareness and prevent people from getting scammed easily. As usual in life, if something sounds too good to be true, it usually is.

Fake Wallet Scams:
Fake wallet scams rob the funds sent to the addresses. This can happen in both web-wallet and mobile app wallets downloaded from iTunes or Google Play Store.

Fake ICO's:
Initial Coin Offerings (ICO) can be legitimate projects. However, 80% of ICOs have turned to be scams in which high returns are promised.

Fake Exchanges:
Cryptocurrency Exchanges that appear out of nowhere and after being active for a few months time, they mysteriously vanish with the funds.

Social Media Scams:
Facebook Groups and Twitter Accounts with misleading information about giveaways and potential cryptocurrency ponzi schemes.

Cloud Based Mining Scams:
Cloud-based cryptocurrency mining scams usually ask for people to agree to sign contracts and invest in Bitcoin mining data-centers. It is quite hard to attest these projects' legitimacy.

Malware:
Given the number of different software programs needed to interact with the blockchain exosystem, it is of utmost importance to assure the legitimacy of our sources. The chances of running into malicious software is high.

Cloned Websites:
Websites that have been entirely cloned to be used as decoy and steal cryptocurrencies and users' private information. Differences in these sites can be as subtle as 'm' instead of 'n'. Always check for HTTPS.

Ponzi, Pyramid & Multi-Level:
Ponzi schemes generate revenue by making the newer investors pay for the compromises taken with the older investors. Pyramid or multi-level marketing schemes are often used in this regard.

Email Scams:
E-mails with fake information. These campaigns are used to collect private data from users. These are known as "phishing".

Pumps & Dumps:
Pumps and dumps are groups that manipulate the market with fake news or high amounts of volume to artificially increase an asset's price. Usually, people unwillingly fall for this.

Fake Support Team:
Another type of phishing campaign. These groups pretend to be the support team of a company in order to access private and sensitive information, like wallet password or private keys.


Have you experienced some frauds in the crypto-scene? Is there anything to add or change in this thread? And most important, how can we protect other beginners from these harms in the future?

[DrewXland]

Great thread. Particularly be mindful of scam ICOs. Investing in ICOs is risky and should be done with the upmost care and research:

Here's five tips to spot the trash ICOs

1. An inexperienced team
 
If the team is comprised of individuals that lack experience or gravity in the crypto sector, then this can be a warning. The presence of venture capture capitalist known in the field should be a big green light – without these individuals, then this could be cause for concern.
 
2. No use case for the token
 
If the token can be replaced by Ether or BTC, then it’s not really needed. For example, in my early investing days I sank some investment in a HR tokenised platform. It had its own native token on the platform to buy services and also then added BTC and ETH. Effectively, there was no need for anyone to use their token. In the end, it was vapourware – all investors lost hard.
 
3. Poor community on Bitcointalk or Telegram
 
Community can make or break a coin. When times are tough, does the team display the integrity and grit to get the job done. How enthusiastic and committed are the community members? If the team convinces others that they are in it for the long haul, then this is a massive plus. This, in the end, is your judgement call.
 
4. No signs of a major exchange
 
This one is a tough one. Platforms during the ICO are not allowed to talk about exchanges for legal reasons so you have to consider many threads to take a view on whether it is likely to make it onto a big exchange (consider community size, backers, whitepaper, team aims). Getting on the Binances and Bittrexs really does benefit the early investor.
 
5. Public sale is too long
 
It’s better to raise 100% of $15 USD than 50% of $50 million USD. I’m not a fan of these mega long ICOs that tie up your investment. Quality ICOs over an acceptable time frame work best.

[brightamo]

As a beginner in cryptocurrency if careful is not taken you might end up been scam by all these racketeering business posing as a scam in disguise.

[BTC111]

This is a very good post. The sad state of the ICO market at the moment is that the vast majority are scams, which really brings down the market as a whole because there's so little trust anywhere. Be careful guys, do your homework before you put money in.

[superving]

Just a reminder to all newbies to stay away from crypto investments,never involve on those program or else you will only lose your money.  All those programs that ask for money are scam.

[joulion86]

I updated the thread and put in the link to my Fake Wallets thread. Thank you for reading!

[boyptc]

This is helpful for everyone and most to the newbies.

There's also another thing for bounty and airdrop lovers that I've read before, those bounty or airdrops that are requiring their participants to send ETH so they can send the tokens afterwards.

[biggNY]

Hi,
the crypto scene is full of users trying to scam you out of your hard earned life savings. If you use your brain and a little common sense, very little can happen to you. Still, as most people (me included) do make some mistakes in life, I would like to share this compiled list of scams with you to raise awareness and prevent people from getting scammed easily. As usual in life, if something sounds too good to be true, it usually is.

Fake Wallet Scams:
Fake wallet scams rob the funds sent to the addresses. This can happen in both web-wallet and mobile app wallets downloaded from iTunes or Google Play Store.

Fake ICO's:
Initial Coin Offerings (ICO) can be legitimate projects. However, 80% of ICOs have turned to be scams in which high returns are promised.

Fake Exchanges:
Cryptocurrency Exchanges that appear out of nowhere and after being active for a few months time, they mysteriously vanish with the funds.

Social Media Scams:
Facebook Groups and Twitter Accounts with misleading information about giveaways and potential cryptocurrency ponzi schemes.

Cloud Based Mining Scams:
Cloud-based cryptocurrency mining scams usually ask for people to agree to sign contracts and invest in Bitcoin mining data-centers. It is quite hard to attest these projects' legitimacy.

Malware:
Given the number of different software programs needed to interact with the blockchain exosystem, it is of utmost importance to assure the legitimacy of our sources. The chances of running into malicious software is high.

Cloned Websites:
Websites that have been entirely cloned to be used as decoy and steal cryptocurrencies and users' private information. Differences in these sites can be as subtle as 'm' instead of 'n'. Always check for HTTPS.

Ponzi, Pyramid & Multi-Level:
Ponzi schemes generate revenue by making the newer investors pay for the compromises taken with the older investors. Pyramid or multi-level marketing schemes are often used in this regard.

Email Scams:
E-mails with fake information. These campaigns are used to collect private data from users. These are known as "phishing".

Pumps & Dumps:
Pumps and dumps are groups that manipulate the market with fake news or high amounts of volume to artificially increase an asset's price. Usually, people unwillingly fall for this.

Fake Support Team:
Another type of phishing campaign. These groups pretend to be the support team of a company in order to access private and sensitive information, like wallet password or private keys.


Have you experienced some frauds in the crypto-scene? Is there anything to add or change in this thread? And most important, how can we protect other beginners from these harms in the future?

great post joulion, thanks for putting this together. I would like crypto scam I hate the most, because it is easy and many people fall for it.

Where scammer is impersonating famous Crypto figure, right in comments of that person's post and offers great giveaway. where you have to send some amount of crypto (mostly ETH) first and he/she will send a lot more back. there are so many ppl that fell for this, particularly newbies.

anyway, thank I bookmarked this post as a reminder for myself

[retprogramisto]

Good post with useful information.

Fake ICO's:
Initial Coin Offerings (ICO) can be legitimate projects. However, 80% of ICOs have turned to be scams in which high returns are promised.

Source that 80% of ICOs are scams? Or this is an estimate from your observations?

[Harlot]

You should have posted on how they can spot these kinds of frauds and how to avoid it as we probably know already on what this scams are. Also good job on spreading awareness on these types of frauds buy like what I said beginners need to know more about the scam happening and how to identify it as newbies rmare always the subject to become the victim as they probably are unaware ofhow these frauds work.

[babyaia]

This topic will help me a lot,I already joined a scam project not only once but twice time.Now I have learned to avoid scams and I hope not to encounter any in the future.

[joulion86]

This topic will help me a lot,I already joined a scam project not only once but twice time.Now I have learned to avoid scams and I hope not to encounter any in the future.

Could you share your experience with us? What made you invest money? How could you have seen it now looking at it in hindsight? Anyway to prevent something like this in the future?

You should have posted on how they can spot these kinds of frauds and how to avoid it as we probably know already on what this scams are. Also good job on spreading awareness on these types of frauds buy like what I said beginners need to know more about the scam happening and how to identify it as newbies rmare always the subject to become the victim as they probably are unaware ofhow these frauds work.

I will slowly build up this thread, always linking the scam to a new thread where the scam will be elaborated on. So this way, people can view the list here, and if they are unfamiliar with one, they simply click the link and get a detailed overview. At least that was the idea =)

great post joulion, thanks for putting this together. I would like crypto scam I hate the most, because it is easy and many people fall for it.

Where scammer is impersonating famous Crypto figure, right in comments of that person's post and offers great giveaway. where you have to send some amount of crypto (mostly ETH) first and he/she will send a lot more back. there are so many ppl that fell for this, particularly newbies.

anyway, thank I bookmarked this post as a reminder for myself

Yeah the classic send me Bitcoin, and I will send you more in return. This will be a good addition, thank you.

[Tobyelphs]

Great thread. Particularly be mindful of scam ICOs. Investing in ICOs is risky and should be done with the upmost care and research:

Here's five tips to spot the trash ICOs

1. An inexperienced team
 
If the team is comprised of individuals that lack experience or gravity in the crypto sector, then this can be a warning. The presence of venture capture capitalist known in the field should be a big green light – without these individuals, then this could be cause for concern.
 
2. No use case for the token
 
If the token can be replaced by Ether or BTC, then it’s not really needed. For example, in my early investing days I sank some investment in a HR tokenised platform. It had its own native token on the platform to buy services and also then added BTC and ETH. Effectively, there was no need for anyone to use their token. In the end, it was vapourware – all investors lost hard.
 
3. Poor community on Bitcointalk or Telegram
 
Community can make or break a coin. When times are tough, does the team display the integrity and grit to get the job done. How enthusiastic and committed are the community members? If the team convinces others that they are in it for the long haul, then this is a massive plus. This, in the end, is your judgement call.
 
4. No signs of a major exchange
 
This one is a tough one. Platforms during the ICO are not allowed to talk about exchanges for legal reasons so you have to consider many threads to take a view on whether it is likely to make it onto a big exchange (consider community size, backers, whitepaper, team aims). Getting on the Binances and Bittrexs really does benefit the early investor.
 
5. Public sale is too long
 
It’s better to raise 100% of $15 USD than 50% of $50 million USD. I’m not a fan of these mega long ICOs that tie up your investment. Quality ICOs over an acceptable time frame work best.

I'd also add here: banning people for asking tricky questions on community groups.

[wvizmanos]

This is helpful for everyone and most to the newbies.

There's also another thing for bounty and airdrop lovers that I've read before, those bounty or airdrops that are requiring their participants to send ETH so they can send the tokens afterwards.

People joining these want to earn money but lost instead. This happened to me during my early days. So from that moment on, I stopped joining airdrops, with or without fees.

[hoangvuthach]

There are many ways to recognize fraud, most people are fooled by their greed. Even though there are a lot of warnings, the blindness of money has made them lose their properties. I can for example IFAN and SKYmining.

[smil3y7]

Excellent post, thank you!

What I've noticed in terms of crypto scams is that there are (or at least were a couple of months ago) a lot of ICO's that offered airdrops by signing up to a typeform type of website. Once you signed up you received an email stating that you need to complete your KYC which was again on a typeform website. The site also included a shortened URL that led to a fake MyEtherWallet site where you were supposed to "sign a message" by entering your private key. And once you did that your funds were as good as gone.

Bottom line? Always check and double check URL's of sites you often use. You never know when you land on a fake site which is meant to clear your wallets.

[Ayuniv]

Thanks for this forum, hope you dont mind sharing my personal experiences as well.

1.I have been a victim of fake exchanges. You see rates are higher than market, then you try to deposit and trade. One exchange disappeared then the other one you cant withdraw coins.

Lesson learnt: if exchange rate is too good to be true, then most of the time its not true. Try to read thoroughly on user feedback, fora and blogs. Try to deposit and withdraw a little amount just to test its functioning. If there is a slightest doubt you may have on one exchange, please do due diligence, or might as well stay out of it. Don't be too enticed with the exuberrant exchange rates, that is a bait.

2. ICO / new coins - in my early stage, ive dwelt in buying coins during ICO, hoping and crossing my fingers that price will go up and profit from it. Most of it,  until now are have lower value, some with no trading volume at all.

Lesson learnt: Always research and don't afraid to ask questions and dont blindly buy or invest on ICOs or even on cheap coins hoping for the value to go up.
a. Check fora - as what ive learnt from this thread, check how engage the developers and the community are, with caution to look out for trolls or minions or bounty hunters who are paid to say something good about the project.

b. Check for their whitepaper. Some coins i have doesnt even have it, some have, however, if you look closely to it, fund distribution is not realistic, roadmaps are delayed, some are obviously copy paste with poor writing, some are confusing, and doesnt even disclose a single person behind the coin. Some would disclose some fake entities which when you try to check on social media platforms, you would have zero results.

Nowadays, i believe if you want to sell your coins publicly, owners should go out public. Why be anonymous? I dont believe for security reasons, how about public security?

c. Lending platforms. More coins now are enticing people to join their lending platforms which locks up you coins for returns from their trading. Some promising returns as much as 60% to 100% monthly. Again, too good to be true. If you look closely on their historical trade, there is zero to neil transaction or falling to stagnant value, how come they are able to give such returns? Definitely not true. There is some lending platform as well you cant even withdraw your remaining btc (which i used to buy the lending coins), and the daily profit i get from them i cant even trade on a reasonable value.

d. The usual MLMs or pyramiding scheme. The payout they give from referrals are out of proportion. Even if it is not, this kind of marketing strategy for coin adoption is a cheap strategy now a days.
 Got to go for now, but ill surely add more of my not so good experience in the future.

Thanks

[DrewXland]

Great post!

The number of scams out there are unreal and it's mostly experienced crypto people/platforms taking advantage of newbie investors or newbie marketers to make money for themselves.

For example, I've taken part in many ICOS that are 100 th the price they are now to when they were selling during the ICO phase.

I've taken part in bounty work, in the past, where the platform will change the payment amount and terms after the work is done!

Above and beyond that people just want to exploit others who want to get involved. My advice build your worth in the space and do nothing for free. Get fair pay for fair work.

Regards

Crypto Coin Dude