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How to avoid crypto scam

TokenScope Team is constantly being addressed by clients who suffered from various scam projects related to cryptocurrency in worldwide and particularly in CIS countries. For the first three months of 2022 we have investigated more than 50 different projects of this sort (GlobalExpertMiners, Scammerdetector, Capitalgroupsfx, Mohazinvestment, Prestige holding, EliteExchange, Fexmongloballtd, Tozems and many others).

The majority of scam projects have many common features that worth paying attention to. This can save your investments and prevent you from being a victimized by fraudsters. In general, many of scam projects have the following scheme: the project collects funds from investors with a call to make profitable investments, after a certain volume is raised or after a certain period of time (usually from 1 to 3 months) the funds withdrawal is suspended and the project is terminated. All previously collected funds of those who have invested in are withdrawn by the creators of the scam project. Scammers just have to make a new sign for the next project and attract investors again. The popularity of scams using cryptocurrencies is quite understandable, because cryptocurrency implies a certain level or anonymity, while the legal status of cryptocurrency has not yet been defined and there is no international practice of interaction between law enforcement agencies to combat such crimes - these factors are used by creators of scam projects, allowing them to avoid responsibility.

Cryptocurrency scam projects are usually promoted as an investment project by strangers in social networks or messenger groups related to investing and cryptocurrencies. Such acquaintances entice by successful experience of investing in this project, boasting of their earnings and achievements.

Scam Symptoms:

  • funds are raised for highly profitable investment projects like mining, stock markets, high-tech, new developments, artificial intelligence etc. The website of the project mostly reports many years of successful experience in investing in such areas;
  • high interest on invested funds from 0.5 to 20% of profit per day, although there are even more "greedy" projects;
  • a grid of investment proposals is available, depending on the terms and the amount of funds invested, for example, beginner, medium and premium package. Access to higher investment opportunities may be an option available after a few days of registration on the website;
  • very often a referral link is offered in scam projects. Using it you enter a project and thus provide the person which introduced you a percentage of your invested funds. You can also attract investors the same way by your own referral link;
  • payments are accepted mostly in popular cryptocurrencies BTC, ETH, USDT, TRON, BNB, LTC, but sometimes it is possible to deposit via e-money services. Some projects convert received payments into its own cryptocurrency (usually it is a mean of payment on the website);
  • in order to prove the significance, scam projects often display on their website various licenses and diplomas, confirming their credibility and seriousness;
  • a scam project company often indicates its legal address in a European country, while phone numbers are almost never specified;
  • scam projects are actively promoted in various groups in social networks or messengers related to investing and cryptocurrencies. Often, the project has its own telegram channel or a bot to attract potential investors.

Tips on how to check a project for scam:

  • to pay attention to the design of the site – scammers that use a single-use websites rarely invest much in design and layout of the site, using one-page sites created with a typical template;
  • to use a service of checking the domain name of the website, for example “whois” service. By using these services, you can check the date of creation of the website and reconcile it with the start date of the project announced on the website;
  • to check the traffic on the site through popular services – low activity could indicate the unreliability of the project;
  • to check the company (investment project) registration number and address in the register of foreign companies (websites of checking services are usually free). Also it’s useful to look for any reviews and comments about the project in the Internet. If the reviews are exclusively positive, there is a risk that these reviews are not true, and could be created for a purpose;
  • after you have received the crypto-requisites of the project, we strongly recommend to do an easy check via TokenScope (cryptocurrency risk assessment and investigation platform), in order to find out when the crypto-wallets were created, how many operations were carried out with them and how much funds are currently stored. You can also check the way the withdrawal is carried out. Low activity on the wallets of the project indicates either that crypto requisites are generated for each client, or the project is unworkable and created purposely for scams.

We wish you successful investments in cryptocurrency projects and, please, don't forget to check the projects for scam, it will save your funds!

The TokenScope Team

#TokenScope #Crypto #Check #AML #KYC #KYT

More about TokenScope cryptocurrency risk assessment & investigation platform on:

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