In recent years, there has been an influx in the interest in Bitcoin and cryptocurrency. With the growing interest, it is bound to have some questionable characters joining the game, all for the wrong reasons and as a result, this has led to more people wondering how to spot a crypto scam.
Scams are everywhere, and in the crypto world, this is no different. If you get caught out and invest in the wrong opportunity, you can lose a lot of money and, the worst part is that it is not always protected. It can be difficult to know how to spot a crypto scam, so in our latest blog post, we will look into how to spot a crypto scam so you don’t lose all of your investment funds.
The Promise of High or Guaranteed Returns
Many scammers will promise the world so you invest your money with them, so it is incredibly important that you do your research and see whether their offer seems too good to be true. This is one of the best ways of how to spot a crypto scam, especially if you are a new trader. An example of this would be a scammer promising to make a 1500% return on your investment which would be amazing, but in reality, this is just not realistic.
To know how to spot a crypto scam of this type is pretty easy, as most scammers will provide fake promises of their returns without any strategy and will often give little to no information on how they are achieving these returns. An ICO is an initial coin offering where they are offering a discount rate, but this will increase dramatically. Now you know how to spot a crypto scam of this type, you need to steer away from it.
Lots of Promotional or Marketing Offers
Another way how to spot a crypto scam is to notice how much marketing they provide. If you are overloaded with marketing ads, then this is likely to be a scam. Massive banners, lots of blogs on it and other promotional offers are all designed to target as many people as possible in the quickest time possible, so they can raise as much money in a short period. The more legit coins won’t advertise or expand exponentially and instead they will develop naturally. This is an easy way of how to spot a crypto scam.
Unnamed or Non-Existent Team Members
A simple way how to spot a crypto scam is to see who are the team members on the project. Like any business, you will easily be able to find out who all the team members are for the project. Once you have all the names, do your research on their background, and check their social media profiles for who follows them and who they follow. Contact these team members and ask them some questions about how they are achieving their promises. If they don’t respond, ignore them. Yes, this sounds like a lot of work, but if you are going to be investing your hard-earned money into something, it is always best to do your due diligence. This is a long way of how to spot a crypto scam, but it works well and ensures that your trades are protected.
Check the White Paper
How to spot a crypto scam? Check for the whitepaper. The whitepaper outlines the initial coin offering (ICO) and describes how the project has been created, how it is going to grow, how the project will make money and will give a whole overview of the project. If the project doesn’t have a whitepaper, avoid it at all costs. If they do have one, but it is overly complicated, this is because the scammers are trying to confuse you as they know the project is fake. This is also a really simple way of how to spot a crypto scam.
Watch Out For Fraudulent Trading Platforms
A cryptocurrency trading platform is a great way to start investing, but do your research first. Check the reviews for the platforms as this will give you a lot of information on how the platform performs and this will likely give you more information on how to spot a crypto scam on the particular platform. Many will offer great start-up bonuses and will also suggest they can beat prices and exchange rates with their automated process, this isn’t always the case.
There are many spammy platforms, but it isn’t hard to decide on the more reputable platforms. How to spot a crypto scam via these platforms is to do your research and see what existing accounts are saying.
Want To Make Safer Trades?
We hope this blog post has provided you with some of the best and easiest ways of how to spot a crypto scam and has given you some valuable tips so that you can go on to make safer investments. If you make regular trades and are unsure of the wallet destination where your funds are heading, check out our Crypto Wallet Checker to give you long-term peace of mind and a quick way of how to spot a crypto scam.