CRYPTO SCAM

An initial coin offering imitates the method a fundraising mechanism companies use to raise funds. Companies sell stocks at a cheaper rate in the stock market to get investment. Similarly, some crypto projects offer tokens to investors in exchange for fiat currency or established cryptos like Bitcoin or Ethereum. Scammers use this method to gain investors fast and then shut down the project, causing it to collapse entirely.

A Ponzi scheme works by paying older investors with funds collected from new investors. A cryptocurrency Ponzi scheme works similarly. It starts with someone investing in a cryptocurrency and reselling them at a higher price, attracting new investors by promoting high returns. Eventually, the scheme falls apart, causing the newer investors to lose all their investments.

A cryptocurrency pump & dump works just like a stock pump and dump. False claims and hype help to boost the price of a cryptocurrency in the market. Then the originators or dominant holders sell their cryptos at an all-time high artificial peak, rendering the rest of the cryptos to lose all their value.

Cryptocurrencies are decentralized, meaning they are not backed by central banks or governments. This lack of regulation makes it easy to manipulate the crypto market. Market manipulation works by artificially influencing crypto asset prices, or influencing investor sentiment. Some market manipulation process includes pump & dump, whale wall spoofing, wash trading, etc.

Some retail establishments claim that they do not accept payments in any form of currency other than Bitcoin or Ethereum. In that case, they are probably trying to scam you. Also, since anyone can open a crypto wallet, and tracking the owner down can be difficult, they can easily take off with your assets