Greed, Love, and Rugpull: The 3 biggest Crypto scams
Welcome to the latest issue of CapitalRollup Digest! Today’s digest is for July 8th and it should take you about 5:00 minutes. We’ll get right to it.
- What does the Market Look like today? (Top 5/10 popular Cryptocurrencies)
Greed, Love, and Rugpull: The 3 biggest Crypto scams
Cryptocurrency scams are rising as digital currency becomes more popular among investors. Those who get into Crypto think it’s a “get rich quick” scheme where you invest and make lots of money. In reality, it’s not true, and this causes crypto investors to make decisions that make them scam victims.
In the crypto industry, scams are commonplace, with reports suggesting that over $1 billion have been stolen by these scammers.
Despite the popularity of these scams, people still find it difficult to avoid them because they don’t know how they work. Today, we’ll talk about them and how you can easily identify them.
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The most common types of crypto scams
Here are three common types of cryptocurrency scams to watch out for:
- Investment Scams (Greed)
- Romance Scams (Love)
- Rugpull
Investment Scams
An investment scam involves promises of a big payout, quick money, or an assurance that you will make money if you invest your money.
They’re so convincing that even professional investors get caught up in them.
The scammers may promise you 1000% profits using the images of celebrities like Cristiano Ronaldo! to get you to invest. Ads will likely show up on your social media claiming people have made huge money through Bitcoin investment platforms.
If you click the fake website, you will be contacted. The scammer will encourage you to make an investment or buy cryptocurrency, through an exchange. Then they will claim to coach you along the way. You can view your profits on a simulated account dashboard.
In the end, you are unable to withdraw your money. In reality, the dashboard was just made up of numbers.
Using platforms like Discord and Telegram, cryptocurrency scammers claim to be financial advisors and contact people.
Investment schemes have always been the biggest scam, and Cryptocurrencies are driving them to new heights. It may surprise you to know that almost $200 million has been lost this year to investment schemes.
Romance Scam
The US Federal Trade Commission (FTC) reported consumer losses totaling $1.3 billion in the past five years, reaching $547 million in 2021 alone, and it is estimated that this number is even higher.
Romance scams usually start when a scammer sets up fake profiles on dating sites and social media sites like Instagram, Facebook, and Google Hangouts. To pull off their scams, they will talk or chat with you severally to build trust. Once that’s done, they make up a story and ask for money or inform you about an investment opportunity.
To demonstrate how easy the investment is, they will encourage you to transfer a small amount. It may pay off quickly. You are then encouraged to invest more.
To increase profits, the scammer will ask you to top up your accounts. If you ran out of money to transfer or wished to withdraw all of your funds, the scammer would stop communicating with you. If this happens, you will be unable to retrieve your investments from the platform or you will be told the investment has failed.
In the Netflix documentary, The Tinder Swindler, three American women got hoodwinked out of millions of dollars on Tinder. In the end, they all acknowledged that they will never be the same again after their romance scam.
Rugpull
If you’re one of the millions that watched the Squid Game on Netflix TV show. Approximately $3 billion was lost to rug pulling in 2021, the SQUID token was a high-profile rug pull, that capitalized on the hype of the Netflix series “Squid Game.”
According to Binance academy, A rugpull in the crypto industry is when a development team suddenly abandons a project and sells or removes all its assets. The name comes from the phrase to “pull the rug out” from under (someone), meaning to withdraw support unexpectedly.
In the crypto world, a rug pull means that the creators of cryptocurrency cash out, and the value of the coin drops to near zero.
Rug pulls are most common in the DeFi ecosystem, On Decentralized exchanges (DEXs) like Uniswap and Sushiswap, since fraudulent token creators can create and list tokens for free.
The developer(s) happens to mint a valueless token, buying them on the market for a low price. The promise of the investment makes investors buy the worthless token, and the price goes up, it’s cash-out time for the developer. He can do this all at once or over time so the rug pull isn’t as obvious. In either case, investors hold worthless tokens, and their investment capital is gone.
How can you protect yourself from these scams?
Crypto investors need to know the risks before investing:
- Always DYOR
- Only invest in things you understand
- Read document releases
- Stay current in tech news
Are you wondering how to protect your money from crypto scams? You might find this helpful.
•Trivia 🤔
When a record is on a blockchain, who can access it?
A. Multiple people at once.
B. One person at a time.
C. The people involved in the transaction.
Find the answer in the next issue of CapitalRollup Digest. 😉
The answer to the last trivia was D.) All of the above.
Crypto Word Of the Day!
💡 Phishing
The use of authentic-looking emails, often purporting to be from a bank or government agency, to trick you into responding with sensitive personal data.
The term used in a sentence:
— Changes in browsing habits are required to prevent phishing.
- Community Update 📢
We organized a Twitter Space session with 3 industry leaders where we discussed “Share your Bear Market experience & CeDeFi implosions”, you can listen to it right here
•What We Are Reading Today 📰
The biggest crypto scams of 2022. Read more
8 Cryptocurrency Scams to Avoid. Read more
Learn and invest in Crypto with friends 💰
Earn unique rewards when you invite your friends to start investing profitably with CapitalRollup.
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