Topic: Crypto scam exchanges and fake p2p transactions (Read 318 times)

This is exactly the point to avoid in this whole crptocurrency spaces, if a user should kill the zeal of getting free money, high ROI, then that's a good step taken in eradicating and escaping scammers tricks. A friend of mine was shown a bag of thousand dollars and was promised to get all the money if he could offer them some little amount of dollar for easy processing, he escaped because free money is never is in his DNA.
Except for the trusted ones, I have exchanged bitcoin several times with strangers but no witnesses beacyse we both a trusted dealers. Everything depends on the first time of dealing and transacting, if it went well at first then take it as a smooth dealer, but witnesses would be prefer because you can't trust at all time.

Most of the crypto investment scam are those top three I have submitted my vote,

1st- Fake Exchange
2nd - High Yield investment scam
3rd - Shitcoins on shady exchanges

These are the usual team says who are handling the projects crowdfunding activities in their telegram channel with full of promises. In the end, it is still a joke about their promise and none of this is true.

BTI's September 2019 Wash trade report
What do real exchanges look like?
Bitcoin Volume Validator

One of good ways to avoid traps from scam and fake P2P platforms is to know what are real ones so please see A list of LocalBitcoin alternatives (P2P marketplaces).

If one is to meet an interested buyer in person to exchange their Bitcoin for fiat or for any other coin, they should meet in a really public place and go along with one to two witnesses, I'd personally not even recommend meeting a total stranger in this way, for me p2p is more comfortable when I'm exchanging with friends or with trusted users from a forum, like btt fir example. Because even if the deal goes smoothly when you meet a stranger in person, you could be tracked back to your home and robbed at a later date with a $5 wrench.

At the beginning of choose exchange, you have to choose the right one. Such as scam would be avoided by using common sense. I know there are some scam tricks which aren't very easy to detect, but most scam methods are very well-known lately. Peoples like HYIP, you can see on Yobit, there are lots of traders as well. Do you think they don't know about their HYIP tricks? They know, but they want to take advantage, someone succeeds & some failures. That's how scammers keep continuing their scam business. To be honest, we can't control ourselves once there is free money or greedy offers. That's the main prevention to prevent scams. About peer to peer trading, I will discourage to make any deal face to face especially during dealing with bitcoin.

Neither do I know one for now too, but I am very sure there are some exchanges that offer gambling, I checked online but I did not see their lists. We should just be careful if we find any exchange offering such, they mostly use it to attract people to buy shitcoins as I commented above.

Some exchanges are well regulated, especially, intrinsically and to an extent extrinsically. But, there are many exchanges that are very shady, they will even be the one to create as many as possible shitcoins on their exchange.

Shitcoins on shady exchanges are really popular nowadays, even normal exchanges or popular one, there are still lot of shitcoins. And also it will depends on how you define how shitcoin altcoin is. But before, you can see a ton of shitcoins within exchange, since before, you can be listed on an exchange as long you have money for the listing fee, but as time goes by, it is kinda become difficult now especially on some popular exchanges.

I have never been scammed ever since i started engaging in cryptocurrencies. The only way I lost money in cryptos was when i was learning to trade through making bad decisions.
I think if one is very cautious and knows what they are doing. They can never be scammed ever. I have a couple of people who were localbitcoins traders I know who got robbed of their Bitcoins on gun point when they went out to meet the interested "buyers" in person.

I didn't see exchanges before, offering gambling to lure people to invest in such a coin. Can you mention some examples please?
I remember how some exchanges offer the option to bet on btc or eth price at an exact near time. Do you call this legit as they don't lure users to buy/invest in any coin? Personally, i don't like it because of the reason you have mentioned about that the role of an exchange is for trading.

I see this to be scam. In conjunction with shitcoins, they are scam. Shitcoins are the ones having high yield investment rates, but still result into losses for most investors as their prices getting decreased more than the investment profit. Especially newbies are the ones losing much.

Scammers do not force, they lure. Normally, exchanges are for trading, not for gambling. There are gambling sites for gambling. The gambling on most exchanges are just to lure people to invest on shit coins. And they can lose. So, it is an indirect means of scam.

Personally, I do not consider this act as a scam. First of all, the investor knew it already that the value of those coins are not stable, just like bitcoin. The only difference is that most of the coins on Investbox are shitcoins (they will lose their value in no time), specially if it is offering that high daily return.

Remember also that there are other traders that will sell their daily returns in order lock their profit and invest once again... You can close your Investment plan anytime, the coins you invested will be brought back to your wallet.

Ofcourse you should not stuck those coin in your Investbox if you know that the coin is so much volatile and it could lose it's value anytime of the day.
The best thing to do here (if you invested on IB plan like this) is to sell your daily return.
Atleast wait for some time for that coin to have lower price then invest again on IB. Repeat if you think it is still worth investing for.

This is actually complicated, so if you do not understand this very well, then you should not invest into it. Otherwise you will just lose your funds.
Know when to release your coins on IB. Know when to trade them. Do not just lie your coins there, you invested on a shitcoin, remember that. (I am talking to everyone)


You can't consider an exchange to be scamming people for such reason. They are just offering.
Unless they are forcing you to use your funds to gamble there, then you can call that as a scam.

Contents
Fake exchanges
High yield return investment scam
Scam trading
Gambling offers
Meet in Person
False/fake messages
Shitcoins on shady exchanges
Conclusion


I have some experience about cryptocurrencies now, I decided to share my experience with the members of this forum and the people that see this online. Although, it may not be new to many members of the forum but I believe few people will gain from this. I have realized if any exchange is legit or scam, there is always possibilities of scam, aside avoiding scam/fake exchanges, there are common few things to know about some legit exchanges also that can actually lead to scam for novice/newbies. Also, there are some transactions that supposed to be completed successfully but made uncompleted as planned by scammers. That said, fake exchanges also are not left out. 

These are what I have known so far (not all happened to me, I also avoided some)

1. Fake exchanges
There are some exchanges created for no two reasons but one, to scam. It can be a fake exchange from scratch or created to mimic the name and/or website of a trustable exchange, This can be worse to an extent of even downloading a fake exchange app on app store, that is why good research before choosing an exchange is very crucial, the best site for such research is Bitcointalk.org and I am happy to be there. Another source to these fake exchanges are phishing attack like through email, also are fake sites and social media. The fake exchanges can be known later to be scam but it would be too late for many novice.
 
2. High yield return investment scam
There are many scam exchanges that offer high yield return of investment to people, this is to decoy people to register and pay into the exchange account as fast as possible, but led to scam. These can also happen on legit exchanges, which means not all legit exchanges can be trustworthy as some can be shady in business, especially to newbies that just joined the exchange. I will like to make an example with the simple calculation below. 

For example (how it happen can on legit exchanges)
I will be using unknown coin W with $1 price before investment that later reduce in value to $0.1 after 1 months period.
Coin name:- W
Investment plan:- 10% daily profit
W price:- $1
Amount invested:- $1000 = 1000W

Daily gain = 1000W x 10  =  100W
                                100

Monthly gain = 100W x 30  =  3000W
Monthly gain:- 3000W = $3000

Monthly return = Monthly gain + Initial capital
                           = $1000 + $3000
                           = $4000
                                           
W coin technical analyisis during the 1 month period
Price at start of investment:- $1
Recent price = Price at the end of investment:- $0.1

Investment gain = investment capital x recent price
                             = $4000 x 0.1
                              =$400

Net profit =investment gain - Initial capital
                  =  $400 - $1000
                  =  -$600

Loss = $600

From the above calculation, it is clear that with the 10% daily return, investors that invested 100% capital lost 60% within the period. Experts could know this is just a trap, novice will not decide to analyze the coin but to just invest and thinking about taking profit after the end of the month, but talk loss. Also, the coin can be new on the exchange and not analyzable, making greed to tempt. This is just an illustration, some exchange can use another ways of investment plan but the losses can even be more.

3. Scam trading
This mainly happen on some shady legit exchanges, the loss is even less than a second, it happens immediately you make a trade, this kind of trade is always getting successful without any delay and the market is readily available to make such scam trade, making traders to lose. For illustration, I will be using bitcoin, tether and above A coin as an example.

Trading capital:- $1000
Bitcoin price:- $10000
A/USDT:- $0.00000001
A/BTC:- $0.000000000001

Using tether to make the $1000 worth of trade
1 tether = $1
A/USDT= 0.00000001 (legit)
A = 100000000
For $1000 = 1000USDT
A x 1000USDT = 100000000000
1000USDT = 100000000000A

Using bitcoin to make the same $1000 worth of trade
1 BTC = $10000
W/BTC = 0.000000000001 (legit)
For $1000 = 0.1BTC
A x 0.1BTC = 1000000000000
0.1BTC = 100000000000A


Scam exchange tactic
1BTC = $10000
A/BTC = 0.00000001 (scam)
A = 100000
For $1000
A = 100000000 = 1USTD =$1

Loss = $1 - $1000 = -$999
Loss = 999

The scam exchange tactics works in a way they represent bitcoin minimal amount to be 1 satoshi, even if the actual coin to trade against bitcoin is less than 1 satoshi, that is where the losses ensue as you can see in the above examples. No matter how high the amount of bitcoin you use to convert to coin A, your bitcoin will only worth $1 after the conversion, even if millions of dollar is used for it. That is why some experts do advice traders to use cryptocurrencies that are low in price like stable coins, doge or any other low price coin for the conversion. But the fact still remain, many new traders and investors are falling victim of this scam.


4. Gambling offers
100% people joined exchanges because of trading and investment, but some exchanges can offer gambling, there can be an option to gamble even before investment, the exchanges make the investment more attractive with high reward by luring users to gamble. Someone people gamble and lose their bitcoin or other funds, some also still could gamble little but the investment turned losses as explained above. Such gambling on exchanges is completely one type of scam.

6. Meet in Person
There are some ways bitcoin can be bought or sold locally, the counterparty can request to meet you personally before making any trade. This can be very dangerous as the counterparty can rob the buyer or seller. Also, another issue is exchaning fake fiat for bitcoin. Certain precautions must be followed in a way no one will scam another. Using p2p exchanges to escrow the funds will be a good option, and also all possible things you can think to make the exchange successful is good, like having a bodyguard around.

7. False/fake messages
Some scammers make use of fake messages to scam victim, but the way to avoid this is to never release bitcoin from escrow until you receive payment. Did you hear about a scammer that Spoofs sms identifier to steal funds from bitcoin user? The attacker/scammer uses a fake sms to deceiving the seller to release bitcoin from escrow, later, the seller realized the message was fake and no money sent. You can read the whole news on cointelegraph using below link.

A Bitcoin exchange transaction resulted in a user getting scammed as a spoofed SMS message from a payment app made it seem that the attacker executed the payment.
https://cointelegraph.com/news/scammer-spoofs-sms-identifier-to-steal-funds-from-bitcoin-user

8. Shitcoins on shady exchanges
This can be on many exchanges, it is even common on reputed exchanges, but it is trader and investor that will know a coin to buy or not, technical and fundamental analyses are important in this case. Shady exchanges can be more dangerous as they have many shitcoins that often become dead and never rise back possibly. And also, shaddy exchanges are not tired of listing many other shitcoins that will eventaully become dead.

Conclusion
Bitcoin and other cryptocurrencies  are not scam but people and exchanges can scam victims, we should not trust any exchange, asking people about such exchanges first is better, this forum, bitcointalk will be of great help in getting answers not to get scammed. We should be wise, knowledgeable and patient, we should not be greedy while dealing with exchanges. Not only exchanges though, but all aspects of life.