“Traps for Investors” – Maxim Kurbangaleev on Crypto Projects


Crypto expert Maxim Kurbangaleev spoke about the fraud and tricks that investors fall for. A high-profile scam project worth $20 million: the RAC (Raccoon Network) token collapsed to its minimum value, and investors could not sell their assets. How come? Jointly with Freedom Protocol, the Raccoon Network crypto platform transferred $20.8 million to a third-party account and left its holders empty-handed.

Russian roulette principle – Maxim Kubangaleev

Despite the abundance of projects on the market (at the moment, according to DropsTab, there are more than 10 thousand of them), there are very few actual “gems” among them. Millions of investors dream of finding rough diamonds to save and increase their funds. Still, they often invest in “sand”: fraudulent projects promise their holders incredible earnings and create an illusion of trust.

“Scam projects hire bloggers and celebrities to advertise and release promotional videos. If new projects at the investment stage are actively attracting stars to cooperate, then there is a high probability of it being a bold marketing strategy. For me personally, a large presence of marketing in the project is a red flag.”, says Maxim Kurbangaleev.

However, many novice investors fall for the marketing ploy of trusting familiar faces. At first, while the scam project attracts as many people as possible, holders feel like real “winners” – the balance on their account grows and multiplies. But here’s the problem: it’s impossible to withdraw assets, and after some time, the investor will have nothing left but to say goodbye to his money.

“Scammers have learned to play well on people’s emotions: on greed and the desire to make money as fast as possible. Investors, especially beginners, most often have low knowledge of the digital asset market, they can easily be confused and promised mountains of cash”, expert Maxim Kurbangaleev believes.


It’s not easy not to fall into the trap of seekers of other people’s funds – scam projects can inspire confidence and seem to be of high quality. The most popular scams – ICOs, network marketing and pyramid schemes – are rapidly learning and adapting to current realities.

Projects that attract attention – Maxim Kurbangaleev

Exciting and promising projects can still be distinguished from scams: often, it is not only well-organized documentation and team competence but also the lack of aggressive marketing. Investors can evaluate the differences using real examples by comparing promising projects with fraudulent counterparts.

“Over the past five years, good projects have also entered the market, for example, The Metaverse Sandbox. Sandbox is a classic sandbox genre project, somewhat reminiscent of Minecraft and Second Life: interesting graphics, ability to build objects, upgrade your character, and so on, – says Maxim Kurbangaleev. – Sandbox has a well-thought-out economy – members can buy and sell land for LAND tokens, acquire and improve items.

Back in 2007, the fact that virtual three-dimensional worlds will absorb the online market was mentioned by the creator of the digital universe of Second Life, Philip Rosedale. Interestingly, as of 2021, over 1 million users are still actively participating in the game, and over ten years after launch, players have spent more than $3.2 billion.

“Another interesting project is Polygon, the so-called Layer-2 solution for scaling the Ethereum blockchain. Polygon is designed to speed up transactions, as well as reduce their cost and complexity”, – Maxim Kurbangaleev comments.

According to the expert, it is also worth highlighting the dYdX project – a decentralized exchange with the possibility of earning on liquidity supplies. Major investors have committed their funds to the project: Andreessen Horowitz (better known as a16z), Naval Ravikant, and Fred Ehrsam, among others.

“dYdX is one of the few DeFi projects that I believe in and whose tokens I keep in my portfolio,” Maxim notes.

According to the expert, promising projects differ from fraudulent ones in terms of implementation quality and work with their community.

“Top projects provide users with many opportunities: for example, dYdX holders can make their proposals and vote on the second level protocol. They also make decisions on the distribution of the fund’s resources, vote for the listing of tokens, and change risk parameters. Good projects really benefit people and market giants invest in them”, – sums up Maxim Kurbangaleev.

Maxim Kurbangaleev: How to choose projects for investment? 

In the cryptocurrency market, any token, including a “meme” token, has a chance to grow and depreciate in hours and even minutes. When choosing projects for investment, it is better to divide your investment capital and diversify your portfolio, the expert explains.

The “don’t put all your eggs in one basket” rule applies in many areas, and this is a fundamental part of investing in cryptocurrency if the investor does not want to lose all the money.

“If we talk about early investments at the stage of token sales, you need to choose proven sites, such as CoinList and DAO Maker. Projects presented on such platforms are being tested, and only startups with a real product can get there: among the largest sales of the same CoinList were Mina, Flow, NEAR, Solana and others. Another way to invest less risk is to search for allocations through friends and acquaintances if you are part of the crypto-venture community. Allocations are often resold: I used this method and entered the Mina Protocol project”, – says Maxim Kurbangaleev.

How to check the project before investing in it?

“First of all, you need to study the team, then the technology, and finally the working business model. To check the developers, you need to get acquainted with their portfolio, see if the team members had projects before and whether they reached the logical point of implementation. With regards to technology, a crypto project must be useful, since the prospect of the product being in demand on the market depends on it. But the key to how the team plans to make money lies in an effective business model, and it also needs to be tested.”, – Maxim Kurbangaleev explains.

There are many exciting technologies on the market today, but there is no monetization behind them, the expert believes. This is explained by the fact that teams do not come from business requests but their vision and ideas. “Talented guys do something cool and useful, but they don’t know how to sell it,” Kurbangaleev added.

Maxim Kurbangaleev: Launching your project and assembling a team is not an easy task

“There are a lot of articles on the Internet about how to put together your team and create a cool product. But in fact, when you put together a “dream team”, regardless of the level of specialists and how much time, resources and money are in the arsenal, the most important criterion is team coherence. To achieve understanding and unity in the team is obtained only after several stages: ostentatious politeness, where everyone tries to make a good impression on each other, and stages of honesty and conflict, as a result of which business processes are born. The emerging processes need to be formalized and “grounded” in some kind of system, improving and transforming them in the future”, – says Maxim Kurbangaleev.

Few people doubt that the success of any project (not only in the world of cryptocurrency) depends on the well-coordinated work of the team, and corporate culture helps to cover many human needs. A promising and valuable project for people is based on important values – for whom the product is being created, what it solves and how it can help. A team with values and an internal culture is likelier to create something worthwhile and exciting.

“Culture should come from the CEO of the team. Finding people who support and understand your vision from the very first seconds is difficult. That is why the team leader must communicate ideas and motivate”, – Maxim Kurbangaleev believes.  

In addition, creating a high-quality project is quite expensive because the project team consists of not only several competent programmers with a marketer but also lawyers and even designers. The easy and cheap way is to copy someone else’s solution and create a clone of the original product.

Perhaps that is why scam projects appear on the cryptocurrency market almost every day, to get investors’ money. The main question of scammers is, why put in the significant effort if you can simply deceive users? While honesty and culture for them is a secondary issues.