7 Warning Signs That Reveal Fraudulent Cryptocurrencies.. What Are They?
While it is certainly possible to make money with cryptocurrencies, it is also easy to fall victim to a scam. So here are 8 warning signs that will tell you if cryptocurrency is a scam. What are they?
1. Assuming the worst: The safest way to spot a scam is to anticipate it. According to experts: “Many cryptocurrencies are created deliberately to deceive those who buy them.” Be aware. Some new currencies may be created with relatively good intentions but end up collapsing.
2. New and unestablished currency: Experts recommend investing in established cryptocurrencies that have many years of trading and activity in the market. A high market cap is another strong indicator of the currency’s trustworthiness.
3. Lack of news and information: Another sign of a scam may be that when you search for information about it on Google and the news, you can't find anything.
4. High value before mining: Another indicator of a potential scam is if the coin had a high value before mining. This means that the creator of the coin has the ability to devalue the coin by selling it quickly.
5. Massive Trading Volume: Alof said that most decentralized exchanges allow you to see the trading activity for the token, so if you notice a massive increase in trading volume, it is imperative to do more research on the token.
6. Unexpected Contact: According to Brittany Allen, Senior Trust and Safety Engineer at Sift.com, one of the most deceptive schemes is unexpected contact. Here, scammers lure victims through dating apps or social media.
7. Insisting on changing messaging platforms: One way the scam happens is that the scammer will ask you to switch from one trusted or well-known messaging platform to another.
