There is a new wave of confidence and excitement among Bitcoin investors as the cryptocurrency enters a bull market. But new scams have emerged to take advantage of the heightened attention. Scams can take many forms, from straightforward phishing efforts to elaborate Ponzi schemes that target naive or eager investors. Learn about the most well-known Crypto scams of all time, how to spot them, and how to stay safe during the Bitcoin bull market right now by reading this article.
The Rise of Cryptocurrency and Fraudulent Schemes
Cryptocurrency has come a long way from being a specialized hobby to a widely used investment tool. During the bull market, the value of Bitcoin—the dominant digital currency—has grown tremendously. Unfortunately, the cryptocurrency market has become a haven for fraudsters due to its fragmented and uncontrolled structure. Scams targeting both novice and experienced investors have increased dramatically due to the mix of high volatility and speculative investing.
A History of Crypto Frauds
Several high-profile cryptocurrency scams have occurred throughout the years. Many of these scams have taken advantage of the volatility of the market and the anonymity that blockchain technology provides. Included among the most infamous cons are the following:
Bitconnect The Ponzi Scheme That Shocked the World
Regarding bitcoin frauds, Bitconnect is up there with the biggest names. Its lending program promised substantial profits since its 2016 launch when investors could lend Bitcoin and get Bitconnect tokens daily in exchange. This Ponzi scheme followed the traditional pattern of using fresh investments to repay previous ones. Investors lost billions of dollars when the site went down in 2018. The story reminds us of the risks of promising guaranteed returns in cryptocurrency, even though it has collapsed.
PlusToken A Multinational Scam
PlusToken was yet another Crypto investment fraud that predominantly affected people in Asia. With its investment platform pitch, PlusToken amassed almost $3 billion from users. Many investors lost all their money because the operators vanished after collecting the funds. As a result of the PlusToken operators selling off many cryptocurrencies, the market liquidity and prices took a nosedive.
OneCoin A Global Crypto Fraud
Despite OneCoin’s early claims of being a cryptocurrency, it was always a fraud. Ruja Ignatova launched OneCoin in 2014 with the promise of substantial profits for investors who bought instructional packages. Users could acquire OneCoin tokens through these packages, which could be used for trading. In reality, though, it was a complete pyramid scheme. After the scam left investors with doubts and Ruja Ignatova’s 2017 disappearance, nobody knew what happened.
How to Protect Yourself From Crypto Frauds
As the bull market for Bitcoin continues to gain strength, it is necessary to maintain vigilance and protect yourself from falling prey to fraudulent schemes on the market. To assist you in remaining safe, here are some strategies:
Conduct Thorough Research
It is essential to do one’s homework on a cryptocurrency project before investing in it. Research the investment’s backer by reading whitepapers, looking for user evaluations, and learning more about relationships. Make sure the project is well-structured and has a defined path to success.
Use Reputable Exchanges
If you want to purchase or sell Bitcoin, only on famous and trustworthy exchanges. Established platforms with millions of users’ trust include Kraken, Binance, Coinbase, and Binance. Their history of success and adherence to regulations make them superior to unproven exchanges in terms of safety, albeit they are not entirely risk-free.
Never Share Your Private Keys
The private key is the most critical component of every cryptographic security system. Never give them out, especially if they seem to be from a reputable cryptocurrency platform. In phishing attacks, con artists pose as customer service representatives to deceive victims into giving over sensitive information, such as private keys.
Stay Updated on Fraud Alerts
Just as the Crypto industry is constantly changing, so are the kinds of scams people fall for. Keep up with the newest scam strategies by subscribing to reputable Crypto news sources, community forums, and social media organizations. Being knowledgeable is an excellent defence against being a victim of scams.
Conclusion
Be wary and careful since the new Bitcoin bull market could be very lucrative, but risks are also involved. The history of Crypto frauds shows that scams are common, but there are also many real opportunities. You can safeguard yourself from becoming a victim of fraud by performing comprehensive research, adhering to reputable platforms, and remaining educated about any dangers. Never forget that if an offer seems too good to be true, it most likely is.
Read More: A Sustainable Bitcoin Bull Run? The Glassnode Report
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