Cryptocurrencies are popular not only with investors and entrepreneurs. Lack of regulation and anonymity attract a huge number of scammers and scam artists, who come up with new methods to defraud users.
↣ HoneyPot Tokens.
One of the most popular fraud schemes in 2024 is scamming on HoneyPot tokens. At first glance, HoneyPot tokens are no different from other crypto assets and may even seem like a good investment. Admittedly, this is only until you try to sell them.
Honeypot tokens are specifically created and promoted as a win-win high-yielding asset - this will be confirmed by loud marketing and a rising token rate, without a hint of any downturns. Fraudsters artificially “draw” a green chart and inflate the price of the asset, creating an impression of popularity and demand. A beautiful picture is created for inexperienced investors who, in an attempt to make money, buy tokens worth tens and hundreds of thousands of dollars. When a honeypot coin holder wants to sell his tokens, he simply will not be able to do so.
The fact is that the token's smart contract is initially set up to reduce the possibility of selling it to zero. Almost all hanipots have a 99% exchange fee in the smart contract, which will not allow an investor to take even 1$ out of the project. All the money invested in such tokens immediately goes to fraudsters, leaving investors with useless wrappers.
How to avoid: Always check the smart contracts of tokens before buying. Pay attention to the reputation of the project in the crypto community, the presence of trades on reputable exchanges and reviews from independent experts.
↣ “Crypto-MLM”.
In recent years, the crypto market has seen a real boom of MLM-companies offering to earn on everything from trading bots to virtual mining on floppy disks. Contrary to beautiful stories and legends, the earnings of participants of crypto-MLM companies have nothing to do with cryptocurrencies at all. In 99% of cases, “under the screen” of network business are hidden high-risk pyramidal projects, where cryptocurrencies and blockchain are nothing more than verbalizations.
Investors of such “HYIP-projects” earn money only at the expense of new investors.
The more new investors they manage to attract, the more income the project promises its agents. However, when the inflow of new investors ends, the whole system collapses and the participants' money disappears together with the project and its organizers.
How to avoid: Be wary of projects that put the main emphasis on attracting new participants and promise unrealistically high income.
↣ Fake exchanges and fake arbitrage.
With the development of the cryptocurrency industry, the number of scammers who create fake exchanges and crypto exchanges has also grown. Such platforms can have a professional design and functionality that misleads even experienced users. However, the sole purpose of such exchanges is to gain access to the personal data and funds of gullible crypto users. A steady flow of people to fake exchanges is provided by massive advertising campaigns and suspiciously good exchange rates. And when an investor is already rubbing his hands in anticipation of a good deal, he encounters endless problems and simply can not withdraw funds from the site.
It is good if they do not ask to pay an “insurance fee” to withdraw cryptocurrency from the exchange. Recently, scammers have often begun to use schemes with so-called fake arbitrage. They usually offer a “risk-free” way to make money from the difference in cryptocurrency rates on two exchanges. One of the exchanges, as a rule, will be a well-known and reliable platform, which is used to put your guard down. And the second, little-known exchange “in the bunch”, most often belongs to the scammers themselves, who will gladly accept your deposits.
How to avoid: Use only trusted cryptocurrency exchanges that are reputable, licensed and secure. Never trust offers with “guaranteed” high arbitrage profits. Check platforms on independent resources and avoid suspicious offers.
↣ Fake shenanigans and giveaways.
In 2022-2023, fake giveaways and giveaways of cryptocurrencies have become a hit on social media. Scammers create fakes or hack into the accounts of famous people and companies, and then post a post promising to give away cryptocurrency or raffle off valuable prizes.
To participate in the holiday of generosity you need to fulfill one condition - transfer bitcoins or other crypto to the specified address, after which you will be sent an amount of two or even three times more. It is said that 100% of participants in such contests are still waiting for the arrival of cryptocurrency from Ilon Musk, Trump or another selebrity. Another variation of the scheme is fake airdrops. At first, everything will be innocent: you will be offered to participate in an airdrop or send free tokens of a new crypto project to your wallet.
But as soon as you sign a transaction authorizing the use of these tokens, all the funds from your balance will be withdrawn.
How to avoid: No famous person, much less a company, will ask you for money to enter a contest. Always check official sources of information about giveaways and be wary of offeers that are too good to be true.
Conclusion.
Always conduct thorough due diligence on a project, platform or token before investing. Trust only verified and licensed services, study reviews and audits from independent sources.
