The biggest cryptocurrencies frauds

Unfortunately, the crypto world has been quite fertile ground for all kinds of scams. This reached the point where many people came to consider (or even consider) bitcoin and cryptocurrencies as scams, without knowing how to differentiate between unscrupulous initiatives and legitimate projects.

Although cryptocurrencies are used mostly legally, they have also become attractive treasures for criminals, who are quite creative when it comes to laying all kinds of traps to unsuspecting owners.

There are numerous ways in which a fraudster can seize them. As Jeff Schmidt, CEO of security consulting firm JAS Global Advisors said that in any system where humans play an integral role, vulnerabilities due to human nature will penetrate.

Fraudulent ICO displayed

The Initial Currency Offers (ICO) quickly became the preferred method of financing for a large part of the crypto-core startups.

The problem arises from that literally anyone can launch an ICO, because hardly any requirement is needed. This gives the opportunity to many scammers to build fraudulent ICO, backed by projects that, in reality, do not plan to ever specify, because their intention is only to escape with the greatest possible amount of funds.

The ingredients of a fake ICO tend to be excessive publicity, a vaguely described project, ads too good to be true, and anonymous or unreal administrators (they often put famous people as part of the project when it is not true).

False Cloud Mining

The biggest cryptocurrencies frauds

This is a method in which a company offers contracts or shares to clients interested in obtaining profits from the mining (creation) of cryptocurrencies.

It is not a scam by itself, because there are companies that work in Cloud Mining legitimately. However, it is very easy for others to deceive users to buy these contracts, offering unrealistic and supposedly guaranteed profits, when they do not even have the necessary equipment to mine.

This type of scam can even be mixed with a pyramid scheme, promising profits for referrals. Such was the case of MiningMax, a platform that assured its investors to own a mining farm of various cryptocurrencies in Seoul, requested payments to join and implemented a referral scheme. When the new users were not enough to continue supporting the pyramid, it collapsed and the administrators were left with 250 million dollars by some 18,000 investors from 54 countries.

Since this is a method that requires confidence, the best thing, if you want to invest in this way, is to opt for a company that is willing to teach their mining farms in person.

The electronic portfolios that have shown fraud

Not only can exchange houses be false: also wallets. In this case, in addition, it is not enough to stay among the best known portfolios, since the version we are downloading (especially the mobile versions) may be false.

Thus, an unofficial application of MyEtherWallet managed not only to appear in the App Store, but to be one of the most downloaded from the store. Also, up to three versions of a presumed Poloniex app were listed on Google Play last year, and two of them were downloaded about 5,500 times before being unsubscribed from the store. This, of course, gives scammers a unique opportunity to steal credentials and funds: your keys can be copied from the moment of their creation to empty your wallet later, or this can bring some “back entrance” for which your outlets will end up cryptocurrencies.

It is important, therefore, not to choose a portfolio at random from the mobile stores, but to investigate what could be the best option for us according to the equipment we possess and the functions and privacy to which we aspire. Having made this choice, you should always use the official download page.


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