Topic: How to smell fraud in projects and detect Ponzi schemes from far as a Newbie - page 3. (Read 572 times)
August 20, 2023, 07:34:28 PM
In crypto anything can be a scam, because crypto made scamming incredibly easy and safe for scammers. You create a coin, you sell it to people - you legally don't owe them anything, you're not obligated to make it profitable, to make it work. You're just selling a digital asset created out of thin air. Governments can go after ponzi schemes, because they break contracts by not delivering profits, they can't go after crypto because there's no explicit violation of trust. So it doesn't matter if a coin has transparent team, endorsed by experts and so on - they can take your money and legally not owe you anything for it, because you are not investing, you are speculating.
August 20, 2023, 08:33:31 AM
If there is anything simple that I have learned in crypto, is nothing but to be less greedy, this is what some people lack being a crypto person and as long as there is money in a particular place, scams will never cease to exist that particular place, they will keep coming in different forms in different trends and no matter how expert you have been around here, you will come across them. However, it's not everyone that has this sense of smell to convert it easily as a red flag, these scams come and go in every trend but there is always a catch in the way they present them if you carefully take your time to observe, criminals always live evidence behind and that is what I'm going to share with you.
A scam is not limited in any form in crypto, they could be criminals that manipulate people into having their privacy and securities, scammers that generally steal a wallet or drain the wallet of people but the scams I want to share are limited to physical appearance, things you can look from far and detect that you are in the wrong place, some of this red flags are easily detectable but as I have said, greed is what makes many of us into places we are not to be which result to regret of being in crypto in the first place but I will share you some of the ones I have learned so far. Come with me as I share:
High APR and APY: These two are used as a form of reward for people that love staking their coins and tokens, and in return, they are given interest for a period of time, the two are different, APY stands for Annual percentage rate and APY stand for Annual percentage yield and the difference is that APR is compounded and APR are not compounded, so technically APR will be slightly higher but not much gap. The lesson is not about the difference but the percentage these projects gives which are ridiculous percentage as high as 100% to 1000% in other to make people stake their tokens to reduce inflation but they are scams mechanism.
When you lock your coins in any platform that promises high yield is always a trap for people to lock their coins and when the market is going down, you wouldn't be able to sell and whatever the APR they gave you wouldn't be able to compensate you for the loss, they are either scams to prevent you from selling or to take away your coins, no real projects offer high yield, you should be cautious of this when it exceeds 3-5%
Team: There is no good feeling like knowing the people around what you have in your portfolio, it may not be a guarantee of the success of what you buy to hold but knowing that people that are working behind what you invested in reduce the risk of scams and teams running and abandon what you have wasted money on. There are times projects go anonymous for projects like DEFI that are high risk as they always new and test, they do that for disclaimer purposes in case it failed which is the intention is clear. However, there are some projects that hide their identity by using fake ID are always scams because that's impersonation to give an impression of what they are not, this is one of the red flag people should detect during personal research, nobody will tell you this but you alone and the signs are there when they use fake ID from google and Stock images for impersonation.
Plagiarized and Lazy structure of the contents and website: A man that doesn't have time to think will lack tangible art to present and Ponzi schemes don't lack this from their master plan, they lack idea, they also lack reasonable solutions to problems, the only thing they know is to think out of the box to plagiarize another work and promise to do better in the original work so that people will think they are the real deal breaker, while in the process of doing this, they don't do it from scratch, they present the old idea and change the name and places that will looks similar to their scams. Oftentimes, you could see this from their websites, their documentation and whitepapers are copies of another idea and these are the signs to always check in any projects.
Under pressure to rush things: Real project will do their work at their own convenience without procrastination, they don't give into pressure, they take time to build and when they deliver or make announcements, they make sure they meet expectations and don't disappoint, they always work with the road map and keep people along the timeline with the mission they promise from the beginning but Ponzi and scams are easy to detect right from when they do crowdfunding and public sale, always in rush to make money so they can run away with people money without valuable result for the people, sometimes in public sale when they don't hit their scam target, they keep increasing the time over and over to continue their fraud until someone expose them of their scam.
Unregistered company and short time website duration: Another red flag to look out for is when a company that claims to have a project is not registered, a real company will be registered and fully recognized with a registration number to prove they are real and not fake individuals to avoid any doubt that will raise any form of suspicion. When they have their website registered in under a month and will expire in the following year is another thing to avoid, most of them do this to clean their tracks after scamming people with their Ponzi schemes.
Ponzi schemes and scams are everywhere and they will continue to exist but they can be avoided, you just need to be extra careful and sometimes look for the red flags, you will get one or two pieces of evidence to avoid them if you are not greedy, remember a safe investment is a safe mental health and safe future.
A scam is not limited in any form in crypto, they could be criminals that manipulate people into having their privacy and securities, scammers that generally steal a wallet or drain the wallet of people but the scams I want to share are limited to physical appearance, things you can look from far and detect that you are in the wrong place, some of this red flags are easily detectable but as I have said, greed is what makes many of us into places we are not to be which result to regret of being in crypto in the first place but I will share you some of the ones I have learned so far. Come with me as I share:
High APR and APY: These two are used as a form of reward for people that love staking their coins and tokens, and in return, they are given interest for a period of time, the two are different, APY stands for Annual percentage rate and APY stand for Annual percentage yield and the difference is that APR is compounded and APR are not compounded, so technically APR will be slightly higher but not much gap. The lesson is not about the difference but the percentage these projects gives which are ridiculous percentage as high as 100% to 1000% in other to make people stake their tokens to reduce inflation but they are scams mechanism.
When you lock your coins in any platform that promises high yield is always a trap for people to lock their coins and when the market is going down, you wouldn't be able to sell and whatever the APR they gave you wouldn't be able to compensate you for the loss, they are either scams to prevent you from selling or to take away your coins, no real projects offer high yield, you should be cautious of this when it exceeds 3-5%
Team: There is no good feeling like knowing the people around what you have in your portfolio, it may not be a guarantee of the success of what you buy to hold but knowing that people that are working behind what you invested in reduce the risk of scams and teams running and abandon what you have wasted money on. There are times projects go anonymous for projects like DEFI that are high risk as they always new and test, they do that for disclaimer purposes in case it failed which is the intention is clear. However, there are some projects that hide their identity by using fake ID are always scams because that's impersonation to give an impression of what they are not, this is one of the red flag people should detect during personal research, nobody will tell you this but you alone and the signs are there when they use fake ID from google and Stock images for impersonation.
Plagiarized and Lazy structure of the contents and website: A man that doesn't have time to think will lack tangible art to present and Ponzi schemes don't lack this from their master plan, they lack idea, they also lack reasonable solutions to problems, the only thing they know is to think out of the box to plagiarize another work and promise to do better in the original work so that people will think they are the real deal breaker, while in the process of doing this, they don't do it from scratch, they present the old idea and change the name and places that will looks similar to their scams. Oftentimes, you could see this from their websites, their documentation and whitepapers are copies of another idea and these are the signs to always check in any projects.
Under pressure to rush things: Real project will do their work at their own convenience without procrastination, they don't give into pressure, they take time to build and when they deliver or make announcements, they make sure they meet expectations and don't disappoint, they always work with the road map and keep people along the timeline with the mission they promise from the beginning but Ponzi and scams are easy to detect right from when they do crowdfunding and public sale, always in rush to make money so they can run away with people money without valuable result for the people, sometimes in public sale when they don't hit their scam target, they keep increasing the time over and over to continue their fraud until someone expose them of their scam.
Unregistered company and short time website duration: Another red flag to look out for is when a company that claims to have a project is not registered, a real company will be registered and fully recognized with a registration number to prove they are real and not fake individuals to avoid any doubt that will raise any form of suspicion. When they have their website registered in under a month and will expire in the following year is another thing to avoid, most of them do this to clean their tracks after scamming people with their Ponzi schemes.
Ponzi schemes and scams are everywhere and they will continue to exist but they can be avoided, you just need to be extra careful and sometimes look for the red flags, you will get one or two pieces of evidence to avoid them if you are not greedy, remember a safe investment is a safe mental health and safe future.
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