Thousands of cryptocurrencies are floating on the market, with dozens more going live every week. As cryptocurrencies are becoming more popular, we see the number of crypto scams skyrocket. The North American Securities Administrators Association (NASAA) has recently released its annual list of top investor threats. It has urged investors to be cautious when buying cryptocurrencies and other digital assets. The experts in PointPay, a global cryptocurrency banking platform, agree with this opinion. They are confident that investors can avoid common crypto scams by performing regular due diligence. Let’s find out how to spot cryptocurrency scams and enjoy safe and secure trading with PointPay!
How to identify a crypto scam
Badly designed website and poorly written Whitepaper
Checking the website is the first thing to do, in order to determine whether the project is legit or a crypto scam. A poor-looking website with an old or generic blog and missing references can be proof of the project’s inconsistency. A Whitepaper is also very important: it details the concept, roadmap, and how the project plans to grow in the future. Having a closer look at the Whitepaper might raise some doubts. Check if it is full of unrealistic expectations, incompetence, and scam setting.
Promises of unrealistic returns
One of the ways scammers lure people and get their money is by making up fake promises of returns. If you come across a Tweet by “Elon Musk” asking to send bitcoins, and in return, he would send back double the amount - don’t celebrate just yet. It’s a cryptocurrency scam. Fraudsters can also use phishing emails to entrap gullible traders. Bear in mind that any investment needs time to grow in value. If something sounds too good to be true, it probably is.
Unknown team members
Like with any other business, it is usually quite easy to find out who is behind a project. You should find the information about the team members, their background, and check their social media profiles. However, if it’s impossible to find anything about them, or if the project does not have a ‘team’ page at all, it’s better to give such a project a miss.
Feedback and complaints
Seeing other people’s feedback and comments can also be a good way to identify a cryptocurrency scam. Almost everything comes down to one essential rule — Do Your Own Research? Simple Googling can lead to articles, blog posts, and reviews written by others who fell for a crypto scam.
Fake partnerships and false statements
Some crypto scammers are ready to lash out a lot of money on building a network and a community. It requires more time and effort. However, fraudsters think it’s worth it, considering the thousands and even millions of dollars their crypto scam could bring. Scammers can also publish interviews and give different public statements about their projects in order to create an illusion of genuine activity. In this case, it’s more difficult to spot that something is wrong. Always be cautious! For example, always check the token on CoinMarketCap and CoinGecko - the cryptocurrency rating websites.
Enjoy safe trading with PointPay
When trading crypto, one should forget about snap decisions. Assess the situation, do your research, ask questions, and take your time! This is how you can lower the risks of losing funds and enjoy safe trading. The last thing to do is to use a reputable exchange like PointPay, a unique cryptocurrency banking platform that has been in operation since 2018.
Start trading and enjoy dramatic returns on your investments with PointPay!
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