There has been the introduction of many cryptocurrency ventures after its demand for investment broke out in recent years. Due to how productive the sector has been, and its ability to produce a millionaire within the blink of an eye, many fraudsters have used it as a gateway to defraud people.
A lot of investors do not do any background check on ICOs and other projects before investing in them. This is very risky and one of the dangerous thing anyone could do. How fraudsters use huge cryptocurrency return as a bait to steal from people is largely manifested in the report of Australian Competition and Consumer Commission indicating that AU$ 2.1 million has been stolen from Australians.
Scammers normally operate by setting up fake social media accounts pretending to be blockchain developers and famous experts. In this way, they persuade people to deposit their funds hoping to get higher returns in the future. Most of the cryptocurrency related frauds are conducted through this method.
Also, it was reported that 80% of ICOs are scams. The truth is that a lot of them, if not all of them are poorly regulated, and has no insurance for investors. The same can be said of cryptocurrency exchanges. Most of them provide no insurance for investors; meaning investors stand chances of losing the hope of recovering funds in case something happens to the platform.
According to research, most of the exchange websites were created by scammers. They target investors who do little or no review about them before sending huge amount of money to their so-called exchange.
Investing in cryptocurrency with life-saving earnings could be very dangerous as well. The volatility of the market has created a golden rule – invest the amount you can afford to lose. Just as the Dutch tulip mania crashed without notice, it is believed that Bitcoin has not proven itself enough for anyone to invest in them with life saving money.
To invest in Bitcoin, be sure about the legibility of the company you are investing in, and also, conduct a research about how it has been rated. Before investing in a cryptocurrency, grab a copy of its whitepaper and read to understand the master plan of the project.
