The premise is that creating a bunch of demand for an asset - by convincing a lot of people to place orders for it - raises the value of that asset. Just like we see with the pump-and-dump scheme in the stock market, some scammers will inflate the value of a currency by scamming investors into buying in, then sell their own shares while the price is high.
If the caller claims to be with a private company, hang up, find the company’s contact information and call the company yourself to ask whether they contacted you. No one from the government will call you about money owed you’ll always get that information in the mail. Don’t ever give identifying or financial information to someone who calls you asking for it. They give you a wallet address, and you transfer your currency, with no way to trace or retrieve it. The caller states you can clear the debt right away by making a payment over the phone, in this case via Bitcoin. The scam is this: You’ll get a call from the IRS or a private company telling you that you owe money for taxes or debt. This old-school scam has been a way for bad actors to steal credit card information for years, and some scammers have updated to jump on crypto trends. Learn more and get started today with a special new member discount. Over the past 17 years, Stock Advisor’s average stock pick has seen a 640% return - more than 4.5x that of the S&P 500! (as of ).
You’ll get two new stock picks every month, plus 10 starter stocks and best buys now. We think there’s no better place to start than with Stock Advisor, the flagship stock-picking service of our company, The Motley Fool. Once you’ve chosen one of our top-rated brokers, you need to make sure you’re buying the right stocks. If you’re unsure or don’t want to take the time to research coins you haven’t heard of, stick with investing in the top cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Cardano. You can also read the whitepaper created for the currency’s initial coin offering (ICO) to vet more details.
To vet a new currency, start by looking into the team behind its development. With names like Dogecoin and OMG attached to legitimate currencies, it’s no wonder would-be investors can have a tough time spotting this and other fakes. Thousands of cryptocurrencies exist, and new coins are developed regularly. The company claimed the "My Big Coins" it sold was a fully functioning currency backed by gold. government arrested the operator of the fraudulent cryptocurrency company My Big Coin. If an investment provides returns without that fluctuation, be suspicious. Investments should naturally have fluctuating returns from week to week, especially in rapidly changing crypto markets. They also manipulated a huge drop in earnings when they were ready to cash out and "retire."Īlways be leary of investments presented as guaranteed high returns with low risk - that’s a classic too-good-to-be-true scenario.Ĭonsistent returns are also a red flag. Instead of investing funds, the scammers simply manipulated "earnings" and paid investors with funds from new recruits. government arrested a group of men who’d been running the scam BitClub Network, which lured investors with promises of big returns for investing in Bitcoin mining. Whether you're looking for a special sign-up offer, outstanding customer support, $0 commissions, intuitive mobile apps, or more, you'll find a stock broker to fit your trading needs. Once new investments dry up, the scheme crumbles as investors can no longer retrieve their money.įind the best stock broker for you among these top picks. Just like its stock market equivalent, a crypto Ponzi scheme takes the funds of a new investor to pay existing investors. Scam exchanges also tend to charge high initial fees. No investment can offer that, least of all in the volatile crypto markets. To avoid being a victim of this scam, beware of aggressive invitations to use an exchange, especially with promises of high returns or a guaranteed rate of return. BitKRX named itself after the Korea Exchange, KRX, the largest trading platform in the country, and posed as a branch of the platform to lure investors in and take their money. In 2017, the South Korean government spotted one of the most well-known examples of a fake Bitcoin exchange. Please read our Privacy Statement and Terms & Conditions. By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you.