The cryptocurrency boom and the rising market are fuelling speculation and adding new players to the game who do not hesitate to act fraudulently and opt for cheating in order to gain as much as possible at the expense of others.
Not everything can be good around cryptocurrencies and digital assets, there are those who take advantage of the market and with deceit and trickery try to take what is not theirs, promising what they cannot deliver.
It is becoming increasingly common to see platforms that magically guarantee a very high return on cryptocurrency investments, causing the loss of part or all of those investments. Luckily, it is easy to spot these scams and it is enough to do a little research on each project to know that they are not to be trusted.
However, there are evidences that we can detect in this type of business that we would like to list in this post.
1. Secure earnings.
The fixed promise of a return on investment plus a high return is a clear sign of distrust, as the cryptocurrency market is highly volatile and it is very difficult, if not impossible, to guarantee a return on investment, let alone set a specific percentage of profit.
2. Absence of a project.
Companies promising profitability in trading or mining must be able to provide evidence of their activity, i.e. we can find out if there is a company behind it, if there are physical farms in the case of mining, etc. It is quite illustrative that a company cannot demonstrate these circumstances.
3. Lack of clarity in the team.
It is enough to read the legal texts of any website to find out who is behind the project. If in the case of these companies there is no person, no office or any other information, it is quite likely that we are dealing with a pyramid or ponzi scheme.
4. Private cryptocurrencies.
If such companies offer investment in their own cryptocurrency and it is not publicly listed or lacks a whitpaper and a solid project behind it, it is a clear sign that such investment will not be very profitable.
5. Pre-mined cryptocurrencies.
There is a high risk of fraud when the currencies to be invested in are mostly premined and held by the members of the company, as it can be a major market disruption and the profits will not be earned by the market itself.
6. Unknown cryptocurrencies.
We need to be aware of which cryptocurrency our investment is going into. It is likely that a large percentage will be invested in a cryptocurrency that has no value, project or plan and will only be used to earn returns.
7. Method of payment.
One should be alarmed when a company that works with cryptocurrencies only accepts payment in fiat. It is curious, to say the least, that working in the sector only accepts fiat money and not cryptocurrencies. Any serious company accepts payment in cryptocurrencies.
8. Presentation of the project.
A clear example of a pyramid can be seen in companies that, during the presentation of the project, spend most of the talk praising and explaining the returns and profits on their investments and forget to explain the tools or the method to access those profits.
With these points it should be clearer what to invest in and what not to invest in. Although there are good projects and clients who have earned a lot of money with these mechanisms, it is very important to investigate and study the project very well and analyse the system they use. We do not recommend any investment by referencing or by means of a code if you do not know the company that offers it very well, the mechanisms it uses and if it is a recent creation, let us not forget that in the sector there are many companies that are dedicated to it and that have an impeccable track record behind them.
Investing in cryptocurrencies and the risk involved will always be the responsibility of the investor, but we can take steps to detect fraud and false promises.
