Cryptocurrency Scams Are the Thieves of Millions of Dollars, Next Bull Run be Mindful
Cryptocurrency Scams Are the Thieves of Millions of Dollars, So Be Weary
For any critic of the cryptocurrency world, it is a go-to fact that the industry is full of fraud and scams. While it does not exactly run rampant, these forms of theft are responsible for millions of dollars each year that would otherwise be preserved. These scams are varied, which is why it is so easy to trick investors. However, the only shared quality is how they take advantage of participants. As a simple rule-of-thumb, any crypto project that allots much of the “investments” to publicity efforts is probably scamming consumers.
Let’s go back to last year around October, when Bitcoin was reaching about $6,000 in their price tag, commencing a two-month bullish window. The crypto market was starting to thrive at a fast rate, and many investors were happy just to be a part of the monumental changes of BCT and ETH, among others. However, for greedier investors, these gains were insufficient for their cravings. Instead, upon hearing of platforms that claimed to offer guaranteed returns in the form of interest with Bitconnect, they switched.
Anyone that has been watching the industry already knows how everything went down. Bitconnect was ultimately the catalyst for a major scam, but there was one factor that was overlooked at the time – how much money was spent by senior executives to lure victims to their website. Bitconnect was ranked in the top 10 listing of cryptocurrency in October 2017, though their market cap put them in 8th place. Tokens were trading at $213, and the company was feeling good, to say the least.
When chat logs were released from this time, the industry was able to see how the company’s dev fund was holding much of the revenue. However, they were also able to see this money move to Youtuber accounts to make the project seem more appealing and authentic. They also allotted funding to hosting parties to give the biggest earners gifts to keep encouraging them.
One Twitter account has been following this scheme since it began – @bccponzi. As a result, he is also analyzed some of the chats that the media has leaked from Skype of senior executives and employees in the company, like Glenn Arcaro, Trevon James, and Craig Grant. The group was spending $1,000 daily to be seen in advertisements on Google and Facebook in just October. However, Grant’s personal funding was reaching $3,000 daily by November. He admitted, “I don’t track anything. Just spend money, make more money.” At the same time, James was ushering in about $1 million daily with new businesses. In fact, that revenue grew to $10 million a week for just the United States.
While the majority of cryptocurrency projects are scams like Bitconnect, they still waste millions of dollars on efforts that will never bring money back to the investors, which is a major red flag. As a result, even legitimate projects like Dash are being criticized by investing in marketing at all.
The range of scams is massive, so every investor needs to be on high alert. One project is a perfect example of this extreme – HOQU. The founders spent millions of dollars from investment funds to give themselves major luxury items, including sports cars for senior executives. On the other end, there’s Askfm. Askfm is based in the Ukraine, who engaged in a publicity stunt that ended with the death of a sherpa. In a distasteful new venture, they held an airdrop that they advertise in an email that said,
“Askfm kicks off a new stunt – this time without killing a sherpa.”
In comparison, consider Bitcoin. There was not any market spending, and they did not even have any fanfare to roll it out. It grew because it worked, using the success to appeal to new investments. It is no secret that Bitcoin has been the most successful cryptocurrency to date, which makes it worrisome how so few other platforms have worked towards success on merit alone.
In the Proof of Work newsletter, which updates investors and platforms about projects in the industry, is a good way to gauge which endeavors are real. Some market spending is necessary to make sure the platform is known but be weary of the companies that want a good advertisement over great performance.