Projects to beware of: Red flags in cryptocurrencies
In the world of cryptocurrencies, not everything that glitters is gold. There are many projects created solely for the purpose of fraud, or what is known as 'Scam Coins'. Here are the main signs that may indicate a fraudulent project:
1. Promises of unrealistic profits
If the project promises you guaranteed returns like:
'Invest $100 and get $1000 in a week!'
it is most likely a scam. Cryptocurrencies are volatile, and no one can guarantee profits.
2. Ambiguity in the team's identity
When you can't find real names or LinkedIn profiles for the team, or they use pictures from the internet – this is a warning sign. Transparency is very important.
3. A project without a real product
Projects that offer no actual application, platform, or practical use, just 'nice talk' and marketing on social media – often a scam.
4. Pressure for quick entry
Like: 'Limited offer!' or 'If you don't invest today, you'll regret it!'
These are psychological tricks to force you into making a quick decision without research.
5. Unfair distribution of tokens
If most tokens (e.g., 80% or more) are owned by the founders or are anonymous, there is a risk of market manipulation or what is known as 'Pump and Dump'.
6. Suspicious Community
If channels like Telegram or Discord prevent criticism and questions, and expel anyone who asks inquiries – this is suspicious.
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Famous examples of fraudulent projects (in the past):
• BitConnect: Promised very high daily returns… ended in a huge crash and theft of millions of dollars.
• OneCoin: Claimed to be an alternative to Bitcoin… but was actually a massive scam.
• SaveTheKids Token: Used by influencers on YouTube to raise funds then withdrew liquidity and fled.