Since the introduction of bitcoin in 2009, the number of cryptocurrencies has risen significantly, resulting in a lucrative crypto sector. Despite the market's high returns, increasing vulnerability, privacy breaches, and scams scare investors away from investing in crypto. Phishing, hacking, impersonation, and malware attacks are only a few examples of security threats that aim to take advantage of unsuspecting citizens.
Scam coins, on the other hand, are the most common crypto risk, resulting in billions of dollars in losses each year and turning people away from crypto investments. Continue reading to learn what a scam coin is and how to stop being a target.
Well-known Scam coins
One coin
One coin, a Bulgarian-based cryptocurrency created in 2014, is probably the most well-known cryptocurrency scam ever, stealing billions from unsuspecting individuals. The coin was launched with grand promises of a coin similar to Bitcoin that will produce extraordinary income for investors.
Some citizens, however, saw early signs of illegitimacy, and the UK's Financial Conduct Authority (FCA) also issued a warning to investors about One coin. Despite the growing number of warnings about the currency, Onecoin thrived by offering membership packages to draw more investors.
There was no blockchain and no One coin; it was a hoax.
promises, such as a blockchain and a new trading site. Investors started withdrawing their money, but it was too late; many had already lost millions of dollars. The company's creator, Ignatova, vanished in 2017, but his brother, Ignatov, continued to run the scam. Ignatov, on the other hand, was convicted and is now facing a prison term. In only a few years, the perpetrators of this scam were able to make over $4 billion.
S coin
S-coin is a well-known crypto-coin scam that, like one-coin, is focused on false future promises. The currency was expected to go live in 2017, but the platform has yet to release any coins. S-coin promised to tie its cryptocurrency to the price of one Euro, but they didn't have a proper demand-supply system in place.
Users of the platform send Bitcoins and receive S-coins in return. The channel's asset mailing strategy, on the other hand, posed concerns about whether S-coins are legitimate digital assets. The blockchain is an open, stable, and permanent platform for exchanging digital assets. As a consequence, mailing isn't suitable for a digital currency.
Plex coin
Plex coin is another ICO project that has been used to defraud naive and novice citizens. The website, which was shut down a few months ago, raised over $8 million in funding. It offered investors returns of up to 1,354% in less than a month, incentivizing more people to invest in fictitious properties. Authorities, including Sabrina Paradis-Royer, Dominic Lacroix, and Yan Ouellet, arrested and charged the bulk of the senior-most suspects and PlexCorps owners.
Earth coin
Earth Coin was produced as a medium of exchange and is thought to have come from the Litecoin fork in 2013. This project is focused on the earth's features, such as seasons, calendar months, lunar cycles, and so on.
However, the fundamentals of this coin illustrate that it is not a legitimate coin, as little information about the platform is available, and the website does not display the aims or the actual vision and purpose.
Avoiding scam coins
The Project Team's Analysis
The first step in preventing Scam coins is to familiarise yourself with the development team; the platform can name a few team members as soon as a new ICO project is released. As a result, before investing in a crypto project, you can do detailed research on the project's team. A project that does not reveal its team is most definitely a scam, and you should avoid it.
To draw investors, other projects will create fictitious team members with fictitious biographies. It would be helpful if you spent some time studying the people listed and checking them out on LinkedIn. Their absence should serve as a warning sign of an imminent cryptocurrency scam.
Review of the White Paper
The whitepaper sets out the whole ICO business plan, including the different measures that must be taken to ensure project completion and market release. If an organisation refuses to produce a white paper, the project is untrustworthy and most likely non-existent.
It would also be helpful if you considered how the project executes the whitepaper's roadmap. A fake ICO project is one that does not follow the road map.
Study of the Token Sale
All ICOs must have a token or a currency system that allows them to collect funds publicly through crowdfunding. Observe the token sale's success over time and the token's development in the markets. All legitimate businesses should allow users to monitor the ICO's progress; if you come across a project that hides the token sale's progress, stay away.
Thoughts
Every year, the crypto community launches hundreds of projects; however, some of these projects are nothing more than promises that never materialise. A study of some of the most popular scam coins in the past indicates that millions of people are still unaware of the scams. As a result, many people have lost their money in phoney money transactions.
However, there are ways to reduce the risk, the most important of which is to be careful when making online crypto transactions. Examine the existence of the team, the white paper's presence and adherence, and the token sales. Taking precautions will help you secure your money from scam coins and other cryptocurrency scams. Furthermore, be careful of individuals, wallets, or exchanges in the crypto world to protect your money from other types of crypto scams.