Topic: How to smell fraud in projects and detect Ponzi schemes from far as a Newbie (Read 632 times)

This is an example of a classic ponzi scheme. The main mistake of those who fell for this hook and lost their money is that they considered themselves smarter than others and thought that they would be able to withdraw their money before the pyramid collapsed.

Well, this is absolutely true. Don't easily trust new people, especially if you know them through social media. If we have friends who already understand the world of crypto, it's better to ask them directly, don't think we know everything about crypto investment.

When talking about fraudsters, I remember that in my area, the term investment fraud was known in my area. Usually they use this scheme with "fake trading robots" they promise big profits but in reality the money paid/money earned by investors is actually money from other new investors, so every time there is a new investor the money is used to pay old investors.

Yeah and it is even happening digital and even though it isn't fully anonymous in here, you're kinda doing some things under the radar and people might not even try to pursue scammers that much and that's why those scambaiters like Kitboga are amazing for doing their stuffs even if it isn't 100% crypto scambaiting.

Even if you consulted with the cyber crime police, I don't think that they wouldn't be able to do so much since many stuffs can be faked online easily and there would be almost little to no trace for leads on the identity of whose behind the fraud.

"Stupidity" is kinda harsh word. Scammers would improvise in their schemes. Started with just a simple phishing then lots of ways to scam people or deceive people like in ponzi schemes pop up. These scums also play the psychology game, and not just straight up attempt to "give me all your money and I give you something".

Mostly people were scammed because of their own stupidity. People want to rich faster through an easy way but that way leads them to get scammed. If you want to be rich then do hard work and do not use any shortcuts. You have to know what is a scam and what is not if a project pressurizes you in the sense of timeline that it has a limitation or limited slots etc. Then it will be a scam, Avoid the project that gives you a big bag of money in a short time period, And check the details of that project if it does not show any transparency of its team, finance, etc., and get maximum negative online feedback than stay away from it. Human have a greedy nature and that create problems for you so suppress that and also do detailed research while joining any project

Quitting signal groups, investment groups, trading groups will reduce traps from scam groups, scam influencers and will help to reduce unnecessary greed and uncontrollable emotion and psychology.

It's good to do that prevention if we think we can not control our greed, emotion and psychology.

Experience only can help if you can improve yourself and can control your emotion and psychology better with time and your experience. If you can not control them, how many years you spend in the market and how many lessons, painful losses you got won't help you to be a better investor or trader.

Nice work OP, I think there would have been a topic like this before, therefore it is extremely great of you to bring this to our attention once more.


Greed is one of the major factors that causes people to lose money not just in the crypto world alone but in all aspects of life. Seriously we all have a certain percentage of greed in us but it is left to us to try and minimize it so it doesn’t affect us in any way. It may be difficult to overcome but once we do there is a high chance of success in what we do. In crypto it has caused damage to alot of people because they were unable to fight it and they let it take control over their decisions. I think as a crypto person it should be your first obstacle you must overcome before investing.


There is a popular saying money is the root of all evil, so wherever there is money there is always people trying to get the money by an illegal means and People come with various format just to steal money away from it’s rightful owners. Scam is becoming more and more rampant now and some people even depend on it for survival so we have to always be on the lookout to detect scam, it doesn’t matter of you are an expert or not if you are not careful you may end up being scammed. Now that we expecting a bull run we should even be more careful because it is the season where scam projects and ponzi schemes are more common, it is a period when people will be plotting for ways to capture their prey as everyone will be on the lookout for projects with high potentials.


Good point OP i have seen and heard of how some projects hide their identity and go anonymous and how some projects impersonate other projects just to lure in investors but i think you could have done better by sharing how new investors can detect such projects while doing their own research so they don’t fall for such scam.

Truly seeing is believing hence they are curious about what they had showed them in the course of deceiving them to invest in their  scam projects. Like you have said about common sense, it is indeed not common as not everyone reasons well when they are in such position. The hunger and desire to make fast money is what they are just after and would not likely hid to advise from anyone at that moment until it dawned on them that they have been scammed of their hard earned resources.

Nevertheless, they say  "experience is a teacher" after getting the first hand experience of being scammed some learn their lessons while others seek further to gain more knowledge and some cry foul and call it a scam.

A good post that's been put on Beginners & Help section, and this thread will at least help those beginners out there on what thing should they avoid when they're investing.

TBH, aside from the videos that I'm watching on Youtube regarding tips, and tricks to know when a project is a scam or not, this forum also helped me a lot especially with these kind of threads. That was back when I was a newbie in investing, and it's still good to see some users sharing tips and tricks to other newbies. These are only some of the things that we need to watch out for whenever we are investing, and there are many more factors.

Whatever happens, there will, and will always be people who will become greedy especially when it comes to money. That's why even though we are constantly giving warnings, advices, tips and tricks, and signs to these investors, it will all be useless when they become greedy. There's a famous quote that says "When Emotions are high, Intelligence is Low." Sometimes, these investors aren't thinking anymore whenever they see a project that's giving high APR to the investors.

I just want to say thanks to the OP for saying the text that I bolded. I have been experiencing many problems on a daily basis like most of the people out here, and I don't want to add investing into my problems that's why I'm focusing more on safer investments than those risky ones because I don't want investing in general be another problem for me. Maybe me experiencing being depressed is also one of the reason why I want to focus more on safer investments since I want to focus on my mental health more.

You're absolutely right those Ponzi schemes and scams will pop-up everywhere and we must have to get proper awareness in order to be safe from their trap. I've personally got so many scan mails and messages, but as I was aware of their scamming tactics I avoided them and never replied to their mails or messages. Sometimes I replied to their messages in a way that they may consider me a mediocre who doesn't have proper knowledge about such scams, and the technique worked as most of them did their best to convince me that they are going to pay me a lot of money if I send them a fee for their service. I don't think that those scammers can manipulate the ones who have proper awareness and have been in the world of internet for a long time, but yes the ones who aren't aware of their tactics may get trapped easily.

Looking for red flags is the most important thing to avoid being trapped by those scammers and I agree that if we aren't greedy and we give proper time to learn things about an asset then that way we can be safe from the traps of those scammers. I'm more than sure that knowledge and awareness is the most powerful weapon against such scams and Ponzi schemes and all of their tactics fails against someone who has proper awareness and knowledge about such things.

Greed is an emotion, being less greedy may mean less profit because man is created by nature to like to get more money, how to control this emotion is what makes it a catalyst for you to achieve more profits.
The best indicator that you can trust is if the project does not provide an actual service or there is a product that can make this project valuable. All projects that promise you free, fast and guaranteed profit without explaining the risks associated with this project or where the profits will be generated from and what is the possibility of loss, all of them are indicators.
Finally, learning, intelligent questioning, and continuous research are your weapons.

In psychology, it's often said that people see what they want to see and hold to that first, immediate and impulsive thought. There is a keyword that refers to this idea: WYSIATI (meaning "what you see is all there is"), back to that blindness you were talking about.

It is common sense that if something is too good to be true, you should be wary. But common sense is the less common of all senses, and it is extremely difficult to learn or teach otherwise.

OP your article is very much exposing and educative but funny enough not everyone would still hid to advise and be able to put in play the knowledge gained in reading and learning about scams and how they occur. One thing I have come to realize about scams is that their victims are the desperate ones who do not have patience and time to really see the abnormalities in their offers. They are so blinded that they not really have the self conviction to decipher if what they are about going into is real or a scam.

The scammers too take advantage of their ignorance and promise them with lots of high yield returns and lots more which are not feasible and I wonder if this scam of a thing is ordinary or these scammers use something else to do their dirty jobs on their victims that they do not remember themselves while engaging or dealing with them not until they have successfully been scammed that is when they realize that they have been scammed and by that time it's already too late as the scammers have already made away with the funds.

Op provided relevant information that'll help us get to know what's happening on a site, but I'd like to add how to go about the info he provided.

In addition to the spelling errors, check if some phrases on their writeup appears on other websites. You can copy a phrase or sentence, then insert a quote on it and search on google, for example We are the only binary options broker that truly places emphasis on you

Whois is also a nice tool in detecting fraud website - if the website was registered few months ago and the team claims to have 10 years experience in the business, that's a lie at first sight.

Streetview on google Map helps to find a physical address if the site claims to have one, check your google map for the address provided on the website, if it directs you to a wooden house or some place where an office shouldn't be, it's a fraudulent association. They lie about their physical address.

If the site claims to be registered in the UK , visit this website https://find-and-update.company-information.service.gov.uk/ insert their registration number, if details don't tally, it's a scam, also, check the last time the site was filed, does it show as inactive etc.

Check this link for more tips https://bitcoin.stackexchange.com/questions/98743/how-to-tell-if-a-cryptocurrency-exchange-or-trading-platform-is-trustworthy/98744#98744

No one needs to research on any project to know it's a ponzi once those two items are involved. I may not have the dexterity of perusing team members and the inscribed wordings in the White Paper to check if they're plagiarized or not, but once I find unrealistic yield plan I conclude it's a scam waiting to happen. I haven't been wrong on this. The few places I saw such, they all ended in scamming people. Most people who got scammed this way knew what they were getting into beforehand. It's greed that makes people want to risk it with the aim of cashing out before the scheme collapses.

How convenient is it mining those ones? Can they be mined on mobile phones?

Great op! It's nice to see all this you mention. I like how you arrange the method of detecting Ponzi schemes, These can be useful not only for newbies but for any other person that wants to invest in cryptocurrency, as these scammers are very smart and they easily convince people with a little reason. However, it's really nice that we can be able to detect the scam project by using these methods you proved, and it's true that they pressure people to invest so that they can attract many people to invest in their project.


These are not only for newbies but for any other person, even though the OP mentioned beginners. I think he did that because he is also a beginner, and he assumed other forum members had knowledge of what he brought up, which is not the case. The OP is not talking about only bitcoin, as we are not investing in only bitcoin. However, it’s true, as you said, that bitcoin is safer, but we didn’t invest only in bitcoin, and that’s why we need to take precautions when investing in any coin, not only bitcoin.

If the organizers of the ponzi scheme are not too greedy at first, they can attract a lot of people to the pyramid. In this case, if the APR-APY is not too high compared to real figures in the banking sector, it will contribute to the fact that people will perceive it as a successful business, and not as fraud.

Ponzi scheme is simple, you don't need all of those, if a project is more focus on getting more people rather than improving and developing their product then it's a Ponzi Scheme. Fraud on the other hand is much more complex, the High APR-APY might be the easiest way to detect fraud, not just High but an unreasonably High APR-APY, if it's too good to be true, then it's too good to be true.

One thing people should stop doing is stop rushing into every new project that comes around. All that glitters is not always gold.
People always want to follow the trend and do what is trending. This leads a lot of people into various scams. What's worst is people don't even try to research to find out what they're going into.

In my country, there's this project that came out about 2 or 3 years ago. I think it's an exchange. They have their token also but it has not yet been launched.
People were using the project a lot and they got really big. They started sponsoring big TV programs in the country. Some people tried to warn about the project but they were termed "haters".
Recently, the exchange somehow converted every customer's asset into their token without even consulting the customers.
That's not the worst part, the worst part is, the coin has not been launched and we don't even know if it will ever be launched, and even if it will ever be launched as they claim, I don't think many people will want to buy that token. So for now we can assume that all those people have been scammed of their money.

These days, even the OGs are falling for these scams and not just newbies. These scammers are employing new tricks and tactics in defrauding unsuspecting victims. So sometimes, no matter how careful you are, you can never be careful enough.

Sure, not everyone has the sense to detect some red flags of a Ponzi scheme, but the majority of people who fall victim are people who are greedy.

Greed is what always pushes us to scam; sometimes, we do believe that some of these promises will be fulfilled, whereas we know that no company has free money to double your investment or give you a high interest return, but we keep going in every day, and scammers keep benefiting from us, which is why they do continue.

They will use similar methods to the ones we knew, and still some of us will fall victim due to greed and determination to make quick money, which is very wrong, and if we do not stop being greedy, we will always fall for these Ponzi scheme scams.