It is extremely important to be aware of the exchanges Report Scam that are based on the centralized medium and carry the crypto keys. Many fraudulent scammers like OneCoin have made sure that people invest their lifetime savings, eventually ending up in sadness and despair when hundreds of bitcoins are lost at the same time.
In order to avoid such a nuisance, it is always advised to purchase the cryptocurrencies via an exchange that has been recognized by the government. Prominent ones include Bittrex, Bitfinex and Coinbase, to name a few. After the trading session, when you have successfully profited from the trade, it is advisable to move the coins to a local crypto e-wallet, mostly known as cold storage.
An even safer way is to purchase a hardware wallet such as KeepKay or Ledger Nano S. These hardware wallets can hold a limited number of coins, however, with the rapid growth of technology, their storage spaces are also increasing in number. The upside of using a hardware wallet is the prevention of any malicious way of stealing them.
In spite of such precautions, many new traders often fall victim to such crypto scams. The most popular cryptocurrency is the BitCoin to date, however, it’s mining is still a tedious procedure producing 3-15 million tons of global carbon emissions on a yearly basis. In order to bypass such effects, other cryptocurrencies were invented which were called altcoins. Today, there are thousands of altcoins in the market, Ethereum and Litecoin being the most popular ones.
However, since altcoin being the future of cryptocurrencies, many have taken advantage of the situation to create new types of scams in the financial market. Although the majority belonging to the same kind that has been there before, some of the most common ones are listed below. Pump and Dump
Being one of the most classy investment schemes among cryptocurrency brokers, the scheme is made to create a false sense of urgency by providing investors with false misleading information regarding the price of a crypto stock. Then, the crypto fraud merchants, make the price fall by dumping similar shares into the market at an inflated price. Mostly, due to the naivete of these traders, most fall for the scam due to the greed of insane returns but end up with huge losses.
These crypto whales convince the traders about letting out the secret to purchase whatever they can with their limited trading knowledge. This drives up the price of a crypto asset. Since these cryptos don’t have a large hold over the market, it is easy to fluctuate their prices and manipulate them whenever they want. When the trading volume is low, a small bit of buying power is enough to pull the price beyond reasonable levels. After the stock is sold, these crypto whales stop spreading the rumors but the damage has been done. Investors end up in complete shock and agony due to their illiteracy.
Beginners are convinced about the fear of missing out and ending up failing their emotional discipline just to fall for this get rich quick scheme. This fear is one of the reasons as to why the pump and dump is one of the most prominent investment scams to stay away from. Pyramid and Ponzi schemes
A pyramid scheme operates on a networking basis where new or existing traders are offered rewards based on the number of new joiners that they can bring forward towards the scheme. The more the number of enrollments, the more will be the commission.