{"id":88139,"date":"2018-10-09T21:00:59","date_gmt":"2018-10-10T04:00:59","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=88139"},"modified":"2018-10-09T21:11:30","modified_gmt":"2018-10-10T04:11:30","slug":"exploring-cryptos-most-common-scams","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/exploring-cryptos-most-common-scams\/","title":{"rendered":"Exploring Crypto’s Most Common Scams"},"content":{"rendered":"

Cryptocurrency exchanges are still unregulated, though many go to great lengths to operate ethically. Digital assets as of now are not yet insured by organizations such as the FDIC, meaning if you lose your crypto, it could be gone for good. <\/span><\/p>\n

Makers of crypto wallets and currencies have responded to security concerns by implementing advanced security measures, encouraging users to report bugs in the system so they can be fixed, and adopting policies of greater transparency.<\/span><\/p>\n

\"Bitfinex
Related:\u00a0Bitfinex Slams Insolvency Allegations, Reveals Part of Bitcoin (BTC), Ether (ETH), and EOS Holdings<\/a><\/figcaption><\/figure>\n

Bitfinex<\/a>\u00a0recently published links to three of its cold storage wallets<\/a> amid fears of its insolvency, and Binance just announced the publication of all financial information to the public.<\/p>\n

On the individual level, there are actions that consumers and investors can take to better secure their own digital assets and increase the odds that their cryptocurrency stores are safe from harmful attacks. One method is steering clear of common scams.<\/span><\/p>\n

The signs of a scam are relatively easy to notice once you train yourself on what to look for. Three of the most common are \u201cpump and dump\u201d schemes, fake tokens or ICOs, and Telegram impersonators. <\/span><\/p>\n

Pump and Dump<\/span><\/h2>\n

One of the most notorious scams in the cryptocurrency realm, the pump and dump scam<\/span><\/a> inflates the value of a given coin by enticing people to buy and invest in it. Then, as the price climbs and reaches a peak, the original holders of the coin sell off their holdings and leave later investors at a loss. The best way to avoid getting scammed? Don\u2019t get involved in a pump group.<\/span><\/p>\n

Often people already on the inside will invite others to the group, sometimes for a financial incentive, making it appear as though you may receive an incredible return on your investment by jumping in early. Don\u2019t take the bait. Stick with trusted currencies backed by resources you know, respect, and can verify. <\/span><\/p>\n

Fake Tokens or ICOs<\/span><\/h2>\n

Similar to pump and dump schemes, the creators of fake tokens or fake ICOs<\/a> will make exorbitant promises of wealth if you invest in their product. Often the scammers will try to make their offering look legitimate, and usually draft a white paper for their token or coin to entice investors. These white papers will often be littered with typos, mistranslations, and stolen images.<\/span><\/p>\n

\"The
Related Story:\u00a0The Seven Key Signs of an ICO Scam<\/a><\/figcaption><\/figure>\n

Scammers commonly launch a fake smart contract and convince exchanges to list their product, and generate volume on the exchange to get the coin some kind of price listing. After that, they advertise rock-bottom prices to potential investors to drum up further business, because it appears they\u2019re getting a deal. <\/span><\/p>\n

Avoid this scam by checking which exchange the token is listed on. If its a peer-to-peer, decentralized exchange with little to no regulation, the token might not be a safe bet. You can also double-check the smart contract address with a trusted source. Larger exchanges like Binance<\/a> will list all the information on crypto assets traded on their platform. <\/span><\/p>\n

Telegram Scammers<\/span><\/h2>\n

Be wary of invites to join the Telegram community of an ICO, especially one whose white paper looks suspicious, makes outlandish promises too good to be true, or is listed on a suspect exchange. While there are many legitimate telegram channels (check out the CryptoSlate News Telegram here<\/a>), scammers can and do imitate the appearance of a legitimate entity to convince you to give them your money. <\/span><\/p>\n

\"Twitter
Related:\u00a0Twitter Turns to Blockchain Technology to Prevent Scams<\/a><\/figcaption><\/figure>\n

In particular, scammers will impersonate the admin of a prestigious group by copying their avatar and user title, giving them the appearance of that account on cursory inspection. They\u2019ll then message members of that group and encourage them to invest, offering them a bonus if they give money right away. <\/span><\/p>\n

There are a few ways to avoid being hit by this type of scam. One is to check for the \u201cadmin\u201d badge next to the messenger\u2019s name. Another is to ask them to prove their identity by posting a message in the Telegram community\u2019s main group. Admins generally do not message users directly without first posting in the main group, so if they haven\u2019t, that\u2019s a big red flag.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Cryptocurrency exchanges are still unregulated, though many go to great lengths to operate ethically. Digital assets as of now are not yet insured by organizations such as the FDIC, meaning if you lose your crypto, it could be gone for good. Makers of crypto wallets and currencies have responded to security concerns by implementing advanced […]<\/p>\n","protected":false},"author":93,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39,9836],"tags":[],"post_folder":[],"acf":[],"yoast_head":"\nExploring Crypto's Most Common Scams<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/exploring-cryptos-most-common-scams\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exploring Crypto's Most Common Scams\" \/>\n<meta property=\"og:description\" content=\"Cryptocurrency exchanges are still unregulated, though many go to great lengths to operate ethically. 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