update 3 October 2021

Scam Coins: Everything You Need to Know to Identify Them

Since the inception of bitcoin in 2009, there has been a surge in cryptocurrencies, driving to a lucrative crypto market. Although the market has excellent returns, escalating insecurity, privacy infraction, and scams drive investors away from investing in the crypto world. There are many insecurity risks like phishing, hacking, impersonation, and malware attacks intending to take advantage of unsuspecting persons. 

However, the most common crypto risk is scam coins, which lead to the loss of billions of dollars annually, thus driving people away from crypto investments. Read on to understand what a scam coin is and how to protect yourself.

The 4 Most Common Scam Coins

  • One Coin

One coin, a Bulgarian-based coin founded in 2014, is presumably the most famous cryptocurrency plot ever, ripping billions from unsuspecting people. The coin came with grand promises of a coin akin to Bitcoin, which earn supernormal profits for investors. 

However, some people noticed early signs of illegitimacy; the UK’s Financial Conduct Authority (FCA) even warned investors against One coin. Even with the escalating alerts on the currency, Onecoin continued thriving by selling membership packages to attract more investors.

There was neither a blockchain nor a coin dubbed Onecoin; it was all fake. 

The coin began crumbling because of unfulfilled promises, including the promise of a blockchain and a new exchange platform. Investors began pulling out their funds, but it was all too late since many had already lost millions. The company’s owner Ignatova disappeared in 2017, and his brother Ignatov continued operating the fraudulent company. However, later Ignatov was arrested and is facing a prison sentence. This scheme was able to earn the perpetrators over $4 billion from the few years of operation.

  • S-coin

S-coin is another notorious crypto-coin scam, and just like one-coin, it runs on fake future promises. The currency was supposed to launch in 2017; however, the platform hasn’t issued any coin yet. S-coin promised to attach the price of 1 Euro to its cryptocurrency; still, they lacked a proper demand-supply mechanism planned.

Platform users send Bitcoins, and then they get S-coins in returns. However, the channel’s asset mailing plan raised suspicion on whether S-coins are real digital assets. Transferring digital assets safely happens in a transparent, safe, and permanent platform dubbed blockchain. Mailing, therefore, doesn’t suit a digital currency. 

  • Plex Coin

Plex coin is another ICO project used in committing fraud over unsuspecting and inexperienced persons. The platform, which was closed a few months ago, managed to garner over $8 million from investors. It promised investors returns of up to 1,354% in less than a month, thus inducing more people to invest in fake assets. Fortunately, authorities arrested and charged most senior-most perpetrators and PlexCorps owners, including Sabrina Paradis-Royer, Dominic Lacroix, and Yan Ouellet. 

  • Earth Coin

Earth Coin, believed to be obtained from the Litecoin fork in 2013, developed as a medium of exchange. This project depends on the earth’s attributes, seasons, calendar months, lunar cycles, etc. 

However, this coin’s basics prove that it’s not a real coin since little information is known of the platform since the website neither shows the goals nor the actual vision and mission.  

Protecting Yourself From Scam Coins

Researching The Project Team

The first way to ensure that you don’t fall prey to Scam coins is knowing the developing team; the platform should name a few team members immediately after introducing any new ICO project. Therefore, as an investor, you should do thorough research on the project’s team before investing in a crypto project. A project that doesn’t display its team is probably a scam, and you should shun away.  

Other projects can create fake team members with fake biographies to attract investors. It would help if you took a little time researching the individuals mentioned, check them on linked-in. Their absence thereof should send a red alert of an upcoming crypto scam

White Paper Analysis

The whitepaper outlines the ICO’s entire business strategy, including its various steps to ensure project completion and market release. If you encounter a company that doesn’t show a white paper, then the project is wholly unreliable and probably non-existent.

Moreover, it would help if you considered how the project implements the roadmap displayed in the whitepaper. Non-adherence to the road map is a sign of a fake ICO project. 

Token Sale Analysis

All ICO’s must embed a token or a currency system that will help them publicly raise funds in crowdfunding. Watch the token sale performance over time, and see the progress of the token in the markets. All real companies should allow users to chart the ICO process; if you notice a project that hides token sale progress, avoid it.

Final Word

The crypto world releases hundreds of projects every year; however, some of these projects are just promises that never solidify. A look at some of the past most common scam coins shows that millions are still unaware of the scams. That has led to many losing their wealth in fake money deals. 

Bitcoin live price
Btc
Bitcoin
$51.256
price
7.84406%
price change
BUY NOW

However, there are ways to mitigate the risk, and topmost is being cautious about your online crypto deals. Examine the team’s existence, white paper presence and adherence, and analysis of the token sales. Taking precautions will help protect your wealth from scam coins and other crypto scams. Moreover, to protect your wealth against other forms of crypto scams, beware of the persons, wallets, or exchanges in the crypto world.

More posts

Top 5 Cryptocurrency Projects on Cardano (ADA)

2021 continues to be the defining year for Cardano (ADA). In terms of market capitalization, Cardano rose to the top as the third-biggest blockchain-based platform. As more Cardano projects step into the light, investors are optimistic about the future growth of Cardano. As a uniform ecosystem, Cardano continues to become more flexible, sustainable, and fast. The consistent growth of Cardano has made it possible for projects to be viable and achieve growth without issues. Interestingly, ADA doesn’t share some of…

Top 5 (NFT) Play-to-Earn Cryptocurrency Projects To Watch in 2022

The gaming industry is transforming as we speak. The sudden surge in blockchain-based games using the play-to-earn (P2E) model has undoubtedly attracted the attention of a subset of gamers. For those gamers, playing games is no longer just a hobby; it’s a means of income. So, if you want a slice of that pie, you should keep an eye on these play-to-earn NFT projects coming in 2022. HeliconNFT HeliconNFT is an ambitious ecosystem that brings together NFTs, DeFi, and gaming.…

Top 7 Coins on Binance Smart Chain (BSC) to Watch in 2022

Binance Smart Chain continues its streak of unprecedented growth. Whether it’s token swaps, NFTs, or decentralized markets, BSC supports more than one option to earn significant yield and make the crypto landscape more exciting. Binance Smart Chain is a one-of-a-kind new blockchain with a dedicated environment that supports decentralized and high-performing applications. The cross-chain compatibility of BSC is one of its hallmark aspects. Also, it allows users to reap the benefits of Binance Chain and Binance Smart Chain. But unlike…

Top 10 NFT Projects to Invest in 2022

In 2021, NFTs rose to new heights and managed to draw mainstream attraction. In 2022, it makes sense why so many crypto investors and enthusiasts want to be part of the NFT revolution. Technically, you can use NFTs to distribute assets and validate authentication through the blockchain. It is a new paradigm where NFT rule and run on smart contracts. Popularity and Practicality of NFT Projects Although the NFT market is still evolving, there are more than enough NFT-based projects…

Is There An Ethereum ETF?

There’s been a lot of talk about crypto ETFs as of late. Specifically, Bitcoin ETFs. Last month, the very first Bitcoin ETF was launched in the United States. It pulled in over $1 billion in volume in just two days. Most importantly, it was praised for reeling an all-new investor base into the asset class. However, Bitcoin isn’t the only cryptocurrency in town. Ethereum – the second-largest crypto – has also seized the interest and funds of major investors. These…

What Is A Bitcoin ETF?

On October 19th, 2021, the first Bitcoin US Bitcoin ETF launched on the New York Stock Exchange. This was a long-awaited event for the crypto community, which viewed it as a significant milestone for the industry. The debut was hyper-successful, too. Within just a day, the ETF generated over $800 million in trading volume. It was the second most lucrative stock market debut ever on the NYSE, behind Black Rock’s carbon fund. Why the enthusiasm? What is a Bitcoin ETF,…

The Genuine Value of APIs

This McKinsey's investigation states that at least $1 trillion in economic profit can be available globally. This money may come  from reallocating incomes across various ecosystems.  Most importantly, APIs are the linking points between technology and businesses. Today, the increasing value of APIs has resulted in the API economy. Organizations are still failing to understand the significance of securing a solid and reasonable API methodology. They consider their worth to be augmentations of internal service-oriented architecture (SOA). However, this is…

Is It Safe to Use Bitcoin Blockchain?

New Bitcoin investors often worry about how safe this technology is. And, since buying BTC could be expensive nowadays, they are not wrong to enquire about crypto safety. After all, their assets are on the line if something goes wrong with the blockchain. Bitcoin is one of the most popular digital forms of money on the planet. It has been around since 2009. For the past 10 years, this virtual currency has demonstrated to be exceptionally strong in ensuring data security.…

These Women-Led Crypto Projects Are Driving the Blockchain Industry

Blockchain and digital money have become another front in the development of the financial industry. Historically, this sector has been men's playground. However, an emerging trend of successful businesswomen has entered the fray. Today, we look closer at the women-led crypto projects ushering in a new financial and blockchain technology era. Lightning Labs The prime supporter and CEO of Lightning Labs, Elizabeth Stark, is a teacher at Yale University and a business person. She saw a chance to develop blockchain…

Crypto Sustainability and Green Solutions at COP26

It is no secret that cryptocurrencies come with a significantly high carbon footprint. Today, cryptocurrencies are more mainstream than ever and even regulate different markets. So, crypto issuers are surely researching how to cut back the energy costs. In 2021, cryptocurrency mining will turn to renewable energy use. In fact, using this type of energy would accelerate crypto adoption in many countries. During the 2021 COP26 summit, many crypto experts analyzed sustainable crypto initiatives that made the crypto news. Long-term…