Many years ago, when touring the Eiffel Tower, I laughed to myself as I walked past tourists playing the shell game, wondering how anyone would fall for something so obvious a scam. In the shell game, the scammer shuffles a ball between three cups. All you have to do is make a wager, pick the correct cup where the ball is. You get it right, you double your money. You get it wrong, you lose everything.
What could possibly go wrong?
The scammer may even let you win a couple of times, then you make a big wager and lose it all. The scammer can shift the ball when you’re not looking when getting your money out of your wallet or there may be a pickpocket accomplice close to you. This is not a regular casino — the scammer has all the edge.
If it seems too good to be true, IT IS.
This holds especially true for everything crypto. To crypto newbies, promises of get-rich-quick schemes with easy tendies (profits) and overnight millionaires are alluring, but extremely dangerous! Crypto scammers stole $14 BILLION last year, up from $8 BILLION in 2020.
https://time.com/nextadvisor/investing/cryptocurrency/common-crypto-scams/
Don’t become another statistic — avoid these common scams as you begin your crypto journey.
The Discord Impersonator
Discord is the de facto communication platform for most crypto communities. Initially a gamer comms platform, Discord is beloved for its customizability, relative anonymity, and functionality. Tread carefully as popular Discords are rife with scammers ready to take your money. If you follow thought leaders in the crypto space and join their Discord servers, there will inevitably be scammers impersonating these thought leaders. Moderators often play whack-a-mole when attempting to find and ban these tricksters.
The scammer can ask you to do any number of things — sign up at a particular exchange, ask for screenshots of transactions, ask for sensitive information — in exchange for promising returns. Not only do these Discord leaders not have time to interact with individual Discord members (some have over 10,000 members), but also the asks can be quite bizarre.
HOW TO AVOID THIS SCAM
- Set “NO DMs” in your Discord settings
- Be really careful on who you talk to. If someone is promising easy gains, WATCH OUT
Sample scam of Max Maher:
Related — the Expert scam:
Related — the Celebrity scam
If a celebrity or famous person is pushing a cryptocurrency, it’s probably a scam
The Giveaway
Who doesn’t like free Bitcoin? Unfortunately, if it’s too good to be true, IT IS.
Common components of the classic giveaway scam include:
- Being randomly selected — a feeling that you’re special
- Limited time contest — a sense of urgency
- An awarded prize — financial windfall
- Steps on how to receive the reward — simple process to get reward
- Sketchy website with reference code — where it all falls apart
HOW TO AVOID THIS SCAM
- Set “NO DMs” in your Discord settings
- Be really careful on who you talk to. If someone is promising easy gains, WATCH OUT
- “Legitimate” looking websites are very easy to set up. Do your research!
Literal shitcoins & other coin scams, aka The Rug Pull, aka The Pump & Dump
Rug pulls occur when scammers create a coin, also known as an altcoin, build up its value through marketing and then cash out when the coin reaches peak interest, cratering the coin price. “Shitcoin” is a pejorative used to describe any digital currency that isn’t Bitcoin. While there are viable alternative coins (I’ll be writing about some of my favorites for a future post), these rug pull scams involve literal shitcoins.
HOW TO AVOID THIS SCAM
- Check out the website. Does it seem legit?
- Check out the white paper and check the fine print.
- Check out the metrics, like market cap, number of holders, price movements. Does the market movement seem fishy?
- Check out where the coin is listed. Are the many big exchanges or few small exchanges?
- Avoid the Biggest Gainers category in the exchange — this is ripe for a pump & dump
Is Dentrocoin a shit coin? Maybe maybe not. Would I invest in it? Hell no.
Related — the straight up scam
The dead giveaway that the Squid Coin was a scam was that holders COULD NOT CASH OUT.
https://www.wired.com/story/squid-game-coin-crypto-scam/
BONUS SCAM
The Romance Scam, aka The Catfish
You know the story — Girl meets boy. Girl likes boy. Boy promises financial gains. Girl invests and gets big, early profits. Boy asks for more investment. Girl obliges. Boy disappears, never to be heard from again. Girl loses $300k. Boy lives happily ever after. Girl lives in RV with parents.
https://www.nytimes.com/2022/02/21/technology/crypto-scammers-new-target-dating-apps.html
HOW TO AVOID THIS SCAM
- You should not be taking financial advice from someone you meet on an online dating app
