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What Are Cryptocurrency Exit Scams and How Can You Avoid Them?


What Are Cryptocurrency Exit Scams and How Can You Avoid Them?
What Are Cryptocurrency Exit Scams and How Can You Avoid Them?

Coincidences between the two opposing factions in the bitcoin field have made it a highly divisive issue of debate. Those who believe in bitcoin1 and want to keep it secure buy it from believers in the technology. Some people prey on the less-educated, taking advantage of their lack of understanding to con them into handing up their cryptocurrency. These so-called frauds are evolving together with the crypto market. One of the most challenging scams to detect is the departure one. Exit scams are described in detail in this article, along with tips on avoiding being a victim of one visit bitcoin-supersplit.com for more information. 

What Are Exit Scams in the Crypto Market?

One of the most common ways to make money from early investors is to “take out” all of their money. Or, to put it another way, those with significant holdings in a particular new cryptocurrency attempt to artificially inflate (pump) its price by marketing and promotional efforts, only to eventually dump those holdings onto new investors.

Notice the red flags?

Investors should consider the following factors before investing in an ICO, even if it is difficult to pinpoint a suspect one.

Team’s Trustworthiness

Accountability and ownership are the most challenging issues to overcome in the virtual world. Investors should check the qualifications of the crypto team before committing their hard-earned cash to an ICO that appears to be highly promising. You should be aware that you may buy likes, tweets, and followers on various social media sites to create a false sense of online authority and legitimacy.

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 When looking into ICO promoters and the backers of cryptocurrency projects, you should conduct a basic background check on them and their connections/followers. As Blockonomi points out, “the dead giveaway was the fact that the four primary fraudsters involved—two engineers and two executives—were brand-new and had virtually any relationships” on their LinkedIn sites, according to them.

Projections of a Huge Payoff

Why do I have the feeling this is a scam? There’s a good chance it’s that way. A three-year investment of $1,000 would have yielded a profit of more than $50 million if BitConnect had delivered on its daily 1 percent return guarantee. Vitalik Buterin, the brains of Ethereum, dubbed it a Ponzi scam. It unexpectedly shut down the loan and exchange services of BitConnect in January 2018, following a spectacular ascent and an expanding customer base since its ICO in December 2016. BitConnect’s market capitalization plummeted from $2.9 billion in 2017 to $17 million by March 2018. 6

Norms for Writing Documents

The white paper is an essential resource for every cryptocurrency project for explaining everything from the beginning stages of conceptualization to the final product. Investors are suspicious of exit scams when they see white documents that are difficult to understand, confusing, or ambiguous.

Null-Valued Hypothesis

Is there a basic functional model for the cryptocurrency project? It’s unlikely to work if it’s merely an idea or if there is no actual product. Developing new technology from the ground up may be necessary in some cases, but those looking to raise millions of dollars need to demonstrate that their idea is worth the risk. Investors should steer clear of shady investments made by anonymous persons.

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Extensively Publicized Products

Exit scams may also use giant advertisements as a red flag. In countries with a large population, like India, it is usual to see full-page adverts for new ICOs by less well-known entrepreneurs in the print media. According to reports, Confido compensated bloggers to disseminate information on numerous web forums. Investors need to be wary of any ICOs that make large headlines but aren’t suspicious, so they need to conduct thorough research into the promises made.

Exit Scams: How to Avoid Them.

Most investors who enter the market at this somewhat advanced level may ask how they can best distinguish between legal and fraudulent enterprises. To avoid being a victim of an exit scam, investors should keep the following suggestions in mind: Make careful to study the project’s fundamentals before making an impulsive purchase of tokens that a favorite YouTuber is pushing (typically at an already inflated price). 

Without robust foundations in place, many projects end up becoming a cheap “clone” of an already established solution. Make sure you do your homework before investing in initiatives with higher-than-average returns. Many are legal, while others are hazardous. Find out all there is to know about cryptocurrency high-yield savings accounts, such as staking and planting your crops.

The Summary

The unregulated nature of cryptocurrency increases the risk. The investor is ultimately responsible for ensuring that they don’t get conned out of their money. Investing should be preceded by a thorough examination of a company’s financial predictions, management team, and business plan.


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