Finance: how to avoid a stock market scam? How to anticipate financial scams around cryptocurrency? scam-financial-saver-investor- Of course, you have to get into the habit of monitoring the blacklist that the AMF regularly publishes to verify that the service provider in which you are interested is not on it. It is also necessary to verify the existence and the seriousness of the people who carry the project in which you wish to invest. And it is especially important to avoid responding to telephone (or email) requests, because canvassing for the sale of financial products and services is prohibited in France. A company that engages in such practices is by definition not advisable since it is already illegal by the simple fact of contacting you without your asking. Beyond all these recommendations, we can note certain points common to all these scams. Here are 5 essential points that should arouse your suspicion: Finance: 5 sales behaviors that are scamming
1. Sponsorship as the only axis of development and sales In itself, sponsorship is a common business practice that allows a customer who is satisfied with a product or service to recommend it to friends or family. In return for his support and commitment to the brand or company, he receives a reward. Both the godfather and the godchild can receive a gift, a price reduction, free service for a given period, a sum of money or a gift certificate. However, when the sponsorship seems to take too important a place, that it becomes the central element or essential to use the product or the service, we must be careful because it is one of the common points that we find in lots of scams. Example: you unlock your tokens or you earn your tokens when you have invited 3 people to buy tokens. Or, you start to perceive profits with your tokens only when you have invited at least 2 people to join the concept. We have seen it with OneCoin and Bitconnect, crypto-currencies "scam" that used sponsorship to develop or even InitiativeQ, a project that leaves me perplexed because although membership is currently free, the project does not seem rely only on sponsorship. Sponsorship is not a dishonest practice on the contrary, but it is often used by malicious companies. So you have to be careful when the whole project seems to be based only on sponsorship. However, legal or not, this marketing principle is also very widely used by dishonest companies, and in the case of cryptocurrencies, OneCoin and Bitconnect have used this sales system to grow rapidly. Example: You receive 2% of profits on the amount of tokens acquired, but also 20% on the profits of your direct referrals and 10% on the profits of the referrals of your referrals ... then 5% on the profits of the referrals of your referrals from your referrals, etc. Whether sponsorship is simple or through an MLM system, this remains the common thread of many scams and this is all the more true when the project relies heavily or totally on inviting new members. You must therefore be more than vigilant when you are presented with a project and the sponsorship is too emphasized. Banks offer sponsorship offers but it is possible to open a bank account, use it under good conditions and fully benefit from it without having to sponsor new customers. And your client advisor doesn't remind you every week that you need to refer your friends and family to the bank you opened an account with. Crypto currency or token not listed on Exchanges A token or cryptocurrency that is not listed on an Exchange is nothing more than a piece of worthless computer code. What makes a digital asset like a cryptocurrency valuable is the ability to trade, buy and sell it. Sometimes, some project leaders voluntarily choose not to list the token from an ICO to prohibit investors from selling the fruit of their investment (the token). Of course, this practice is not illegal, but it should be understood that the intention remains to keep the value of the token
2. Pyramid selling and network marketing too present A second point that should alert you are companies that offer sponsorship on several levels (also called MLM) or a commission system on several levels for those who would like to become a business provider or consultant. In other words, the principle of Tupperware sale. Then again, MLM sales and multi-level commission schemes are not illegal except in certain countries. Other countries strictly regulate this type of sale. In general, for this type of sale to be legal, several conditions must be met in order not to be considered a PONZI pyramid. I invite you to consult Article L121-15 of the Consumer Code for more information. Regardless, legal or not, this marketing principle is also very widely used by dishonest companies, and in the case of crypto-currencies, OneCoin and Bitconnect have used this sales system to grow rapidly. Example: You receive 2% of profits on the amount of tokens acquired, but also 20% on the profits of your direct referrals and 10% on the profits of the referrals of your referrals ... then 5% on the profits of the referrals of your referrals from your referrals, etc. Whether sponsorship is simple or through an MLM system, this remains the common thread of many scams and this is all the more true when the project relies heavily or totally on inviting new members. You must therefore be more than vigilant when you are presented with a project and the sponsorship is too emphasized. Banks offer sponsorship offers but it is possible to open a bank account, use it under good conditions and fully benefit from it without having to sponsor new customers. And your client advisor doesn't remind you every week that you need to refer your friends and family to the bank you opened an account with.
3. Crypto currency or token not listed on the Exchanges A token or cryptocurrency that is not listed on an Exchange is nothing more than a piece of worthless computer code. What makes a digital asset like a cryptocurrency valuable is the ability to trade, buy and sell it.
Sometimes, some project leaders voluntarily choose not to list the token from an ICO to prohibit investors from selling the fruit of their investment (the token). Of course, this practice is not illegal, but it should be understood that the intention remains to keep the value of the token artificially stable. The consequence is that investors are held hostage, which if it is too long, can lead to a loss of their confidence in the project they have financed. The value artificially held stable then collapses even more suddenly the day the token is finally listed on an Exchange (if it is one day because there is no rule that requires the holder of a project financed by an ICO to list the token on public exchanges). Sometimes, and in the case of real scams, the token does not even exist and the investor just receives a "login" and a "password" to access an interface on which he sees the amount of token acquired but without that the tokens can be transferable *. This was the case with OneCoin and it is also currently the case with InitiativeQ. Again, when a token or cryptocurrency is not listed on an Exchange, one must be vigilant because there is a good chance of being faced with a scam or a Ponzi scheme. * Remember that a token or a cryptocurrency is a fungible, transferable and divisible digital asset.4. A strong incentive not to sell your token In other cases, the token exists and it is listed on one or more Exchanges but there is a strong incentive not to sell: either by penalties for selling the token before a certain time, or by generous advantages. for those who keep the token as long as possible. Regarding penalties, this is a red Ponzi scheme, especially if the condition is associated with many benefits for members who sponsor other members / investors. As for the advantages of keeping the token for a long time, it is more subtle; because in all cases, the interest will be to keep your investment as long as possible to see its value increase or to receive the dividends that the token distributes (if applicable). But on the other hand, if there are unusual bonuses specially awarded to "holders", we can start to ask questions and have doubts about the seriousness of the project. This was the case with Bitconnect which was indeed listed on several Exchanges but which hid a gigantic Ponzi scheme (Madoff type). This scam weighed in over $ 2 billion and shook all cryptocurrencies when the scandal was discovered.
5. To be rich and to become an annuitant: a promise too good to be true As I often say, when it’s too good to be true ... often it’s not true! Any project that promises to get rich quick, to become an annuitant with a starting investment of $ 500 or even to generate 10% per month interest on the invested capital, are without a doubt scams. Without falling into this cliché of the scam, other ICOs will make more coherent promises but when the promises last over time and nothing happens ... one can legitimately wonder if the project funded by the ICO is serious . Sometimes projects start with an honest approach but failing to release a product, the project turns into Ponzi! This is what we have recently seen with TenX or Sirin Labs, which were nevertheless the basis of serious projects but which ended very badly after failing to keep the promises and commitments made during their ICOs. ICOs and cryptocurrencies offer a lot of possibilities, advantages and will definitely transform the way you invest, raise funds, pay, etc. but we must still remain vigilant because there are many scams. I will conclude by "if an unknown bank, located in the islands, were to contact you by email or by phone to offer you to open a bank account that will allow you to become rich if you put all your savings ... would you do it? ? ". I hope you don't! However, if a young company led by an experienced team, based in Paris, offers you to invest in a project that seems coherent and that allows you to save some money on your bank charges ... then you might be right to support this startup.