Cryptocurrency And Bitcoin Scam, Rug pull, Deceiving Websites
If your website is on the scam list and you think that you are not a scammer, contact us. After you provide us with all the proof that you are in Crypto World with good intentions, we will delist you. Usually, you get in this category because you are hiding your team, you have a bad reputation(you are tricking, deceiving, scamming people), and you haven't got a written project whitepaper or is a shitty one....
It is no more news that ever since the bull market of 2017, the crypto space has recorded an alarming rise in the number of scam-related projects and other malicious practices. Unfortunately, the regulatory uncertainties in various jurisdictions and the speculative nature of the market have made the crypto industry a breeding ground for illicit activities. In light of this, we at Cryptolinks have created a category targeted at uncovering crypto scam projects and helping our readers identify the telling signs of a fraudulent crypto website.
Cryptocurrency Scam
Way before the introduction of cryptocurrency, fraudsters have always found a way around security infrastructures to defraud unsuspecting victims of their wealth or steal personal data. The emergence of the crypto industry only provided them with one more avenue to do this. In other words, the creation of crypto was never a precursor to the precarious state of cybersecurity today. Due to the sophisticated nature of scams and the fact that it is a recurring threat to our industrial and economic growth, the absence of crypto or blockchain technology might not have slowed down the rate at which people lose their money to fraudulent schemes.
The real bone of contention is how the promising outlook of crypto has made it a tool for individuals associated with illicit activities.
Why Is Crypto Attractive to Fraudsters?
Several factors have led to the prevalence of scams in the crypto space. In this section, we will explore each.
The Lack of Comprehensive Regulations
It is important to note that the crypto space is still in the early stage of development. Although the technology has existed for over a decade now, it is only recently that regulators have begun to establish its legitimacy. Before, the industry had mostly adopted the trial and error method of introducing and marketing projects to investors.
Back then, investors and participants had to take on the responsibility of researching the legitimacy of crypto entities before investing in them or adopting their products. Likewise, crypto startups were not under any obligation to comply with regulatory frameworks or develop business models reliant on best practices.
These trends make it difficult to identify scam projects since there was no specific licensing framework dedicated to crypto firms and products. And so, anyone could whip up a half-baked product or service, call it a fancy name, promise over the top features and market it to crypto enthusiasts via an unregulated ICO. We witnessed how this knack for cutting corners culminated in the ICO boom era, which later had a devastating effect on the growth of crypto and mainstream acceptance. Though crypto regulation is more prominent than it was two years ago, there is still a long way to go, especially when it comes to keeping abreast of the spontaneous growth of the industry and the many innovations shaping its future.
For now, a majority of regulators are still grappling with the fundamentals of crypto technology. And until they introduce regulations that encompass the numerous components of the industry, participants will continue to nurse the fear of losing their assets or money to fraudulent schemes.
The Lack of Industry Standards
This point is an extension of the argument above. The unavailability of comprehensive crypto regulatory frameworks makes a lot harder to establish industry standards. For one, the security requirements of custodial based crypto startups are not explicit enough. Even though some jurisdictions have imposed best practices for crypto firms, there are still numerous alternatives where startups can set up their businesses without necessarily conforming to best practices. As such, the non-uniformity of global industry standards creates loopholes, which offers scammers an added advantage. The mere fact that crypto scammers can take advantage of the laxity of crypto regulators in this regard means that it takes rigorous research on the part of investors and participants to ensure that crypto projects comply with vague standards.
The Decentralized Nature of The Crypto Market
The major selling point of cryptocurrency is the possibility of enabling economies or networks detached from traditional financial orders. Bitcoin, the poster boy of the crypto economy, creates new monetary dynamics that are alien to conventional surveillance systems. This attribute is even more potent in privacy coins. And for this reason, they have become popular financial instruments for malicious entities. Fraudsters are aware that some cryptocurrencies give them added shields from surveillance systems, albeit with the use of unregulated crypto exchanges and infrastructures.
The Speculative Nature of The Market
Apart from identifying the added advantage of transacting with cryptocurrencies, fraudsters take advantage of crypto hype to lure victims. For instance, fraudsters successfully fed investors a bunch of lies and perpetrated ICO scams because of the hype trailing the success of Bitcoin as an investment asset. In their attempt to partake in the largesse of the crypto market, a vast majority of investors threw caution to the wind. There are very few investment landscapes that are as volatile and speculative as the crypto market. Hence, crypto scammers often play on the hype of new projects and the promise of overwhelming returns just as Bitcoin and some other cryptocurrencies have generated for their investors.
Likewise, it is worth mentioning that the apparent effectiveness of crypto Ponzi schemes or other fraudulent project centers on investors’ penchant for get-rich-quick investment opportunities. Malicious entities understand crypto investor’s appetite for risks and have continued to use crypto to mask their true intentions.
What Are the Various Types of Scams That Cryptolinks Will Cover in This Category?
Like we mentioned earlier, we have introduced the Cryptolinks website to help our readers ascertain the credibility of crypto websites. As such, it made sense that we include a category dedicated to identifying crypto and bitcoin scam sites. However, before we start listing these sites, it is vital to discuss the various forms of scams prevalent in the crypto space and highlight the ones that our review system will target. These crypto scam models are as follows:
Crypto Blackmail Sites
Crypto blackmail is one of the forms of crypto scams on the rise. In this variation of scams, fraudsters leverage on blackmail tactics to force people to send Bitcoin or any other cryptocurrency to a particular bitcoin wallet.
Recently, there are increased cases of email scams where scammers demand BTC from individuals by threatening to infect the recipient and his or her family with the coronavirus. Likewise, there is a rise in Bitcoin sextortion. In this case, fraudsters alert individuals that they have a video recording of them visiting a porn site where they have installed malware and would leak it on the internet if they do not send bitcoin to a wallet address.Fake Cryptocurrency Exchanges Sites
By creating fake crypto exchange websites, scammers can either steal the assets of unsuspecting users or use the site to fetch sensitive information. There are two ways scammers use illicit crypto exchanges to dupe crypto holders. The first entails them to clone the websites of legitimate and operational trading platforms. Once they have cloned the site, they trick the users into believing that they are on the official website of their exchanges and pull all the strings to make them comfortable enough to enter their login details.
For a more elaborate scheme, fraudsters could create custodial crypto exchanges from the ground up and even operate for a while. Subsequently, they can opt to steal users' assets and close up shop whenever they feel like. In both cases, the scammers rely on the inability of users to identify a fictitious website or crypto exchange.
Fake Free Crypto Giveaways
In this popular form of scam, the fraudsters play on the greediness of potential victims. Scammers take advantage of airdrops and bounty programs to entice crypto holders into submitting sensitive information about their wallets. More often than not, these malicious entities organize fake airdrops and later redirect people to websites rigged with malware. Irrespective of the type of dubious crypto prize giveaways adopted, the end goal is to either hijack victims' crypto wallets or steal their identities.
Crypto Impersonation
Crypto impersonation scams are perhaps the most common form of fraud in the industry. To do this, a scammer only needs to take up the identity of a respected individual in the crypto community to promote fake projects or other illicit schemes. This scam is rampant on established social networks like Twitter and Facebook. Recall how some individuals had impersonated the prime minister of Singapore to encourage people to invest in a scam project. Other famous individuals that scammers have impersonated are Elon Musk and Vitalik Buterin.
Crypto Malware and Ransomware
Crypto malware works in different ways. Some stay hidden and are hard to detect, while others encrypt vital files on the infected system and demand for cryptocurrency as a ransom. The former is majorly common for fraud schemes that intend to hijack users' systems for crypto mining, while the latter is a brute attempt to force victims to pay for the decryption of their files. The easiest way to avoid malware is to download files only from trusted websites.
Crypto Phishing Emails and Websites
As mentioned earlier, fraudsters opt to clone established platforms to generate traffic to their websites and distribute malware. These entities carry out these scams through phishing emails and websites. They send out emails with links to a fake website or downloadable file infected with malware. The aim is to have people install malware or trick them into giving up their login details to wallets or exchange accounts
Crypto Ponzi Schemes
It is impossible to discuss crypto fraud without mentioning Ponzi schemes. These scams are similar to pyramid programs on steroids. Here, an organization or company promises to double the returns of its members when they bring in new people to join the scheme. The telling sign of crypto pyramid schemes is that they usually do not have a product or service at the center of the project. The core business approach of these programs is to use the money collected from member A to reward member B. Although those who join these schemes at the early stage would have a higher chance of profiting, those that join at a later time are at risk of losing their investments. Regardless of who gains or loses, the enablers of these schemes always position themselves at the winning side.
Crypto Pump and Dump Groups
Crypto pump and dump projects are other variants of scam prevalent in the crypto space. The common trope for this fraud is that a group of individuals manipulate the price of a cryptocurrency by creating a demand for it. As soon as the price of the token hits a predetermined target, these entities go on a selling spree, which will most likely drive the prices to new lows. In such cases, people who buy at the peak price are always at the receiving end of these scams. Therefore, experts advise traders and investors to research factors driving market sentiments before opting for an unknown coin, suddenly generating a record-breaking uptrend.
Scam Coins and Fake ICOs
It is common knowledge that a lot of money was lost as a result of scam coins or fake ICOs. During the 2017 bull run, thousands of projects came to the fore in the hope of conjuring poorly-crafted projects and creating bogus reasons why it is valid for them to create a token and conduct an ICO. A lot of these scams got unraveled when it was time to deliver, with investors left with coins with no real value. Fortunately, the proliferation of scam coins and fraudulent crowdfunding campaigns put these fraudulent practices under the spotlight and ushered in a wide array of regulations designed to reduce the risks associated with crypto investments.
How Has Cryptolinks Created A Review System for The Cryptocurrency Scam Sites Category?
We at Cryptolinks have created a comprehensive review system for crypto scam websites to ensure that our readers do not fall victim to such malicious attacks. To achieve this, we have combined our knowledge of all the various forms of crypto scams to create the ultimate review catalog dedicated to uncovering crypto frauds.
