3 Big Cryptocurrency Scams Revealed Here
There are a variety of scams in the cryptocurrency space, including the Pump-and-dump schemes, Rug pulls, and Squid game. It is important to know the difference between these scams to avoid falling victim to a fraud. To make the process easier for you, we’ve listed the top common scams in crypto. In addition to Pump-and-dump scams, you should avoid ACChain and Squid game cryptocurrency scams.
Pump-and-Dump Schemes
As the name suggests, pump-and-dump schemes are cryptocurrency scams that involve buying and selling assets at inflated prices. During a pump-and-dump scheme, a group leader declares a pump time, and then announces a coin’s release at a later date. In order to capitalize on the price spike, group members try to purchase the coin before the release date, as this makes it difficult to sell. In addition, the short-term timescale of the pump and dump schemes creates ‘hype’ around a particular asset.
While the price of a crypto currency may spike up astronomically, this rise is not sustainable. A typical pump-and-dump scheme occurs when the price of a cryptocurrency unexpectedly increases, typically in response to positive news about the coin. These “news” coincide with purchases made by insiders, creating a positive feedback loop that propels prices up until a crash. Then, the price of the cryptocurrency drops precipitously.
Squid Game Cryptocurrency Scams
The Squid Game cryptocurrency was launched just after 1:38 PM UTC on November 1. Its developers then yanked the coin from the project, causing $3.36 million worth of funds to disappear within just 10 minutes. Squid Game is a cryptocurrency, but the concept is very similar to a fake lottery, requiring participants to pay a small fee before being entered into the game. The white paper states that there should be a 2:1 ratio of buyers to sellers, but in reality this is a scam. It’s also important to note that the scammers set up a Twitter accounts for the cryptocurrency, and then it’s virtually impossible for people to reply.
While the Squid Game was the most popular cryptocurrency, the crypto scam has spread its reputation. In spite of its high price, the crypto scam was not entirely without merits. It took advantage of the popularity of the Netflix series to create an incredibly popular crypto scheme, which has already robbed over $3 million in investments. The scheme took advantage of the hype on the internet to quickly inflate the price of the cryptocurrency, making it extremely difficult for investors to sell their stake and withdraw their funds.
ACChain Cryptocurrency Scams To Know
The ACChain project originated from China and raised about 80 million dollars. However, the founders of ACChain did not appear dedicated to the project and were implicated in other scams. The company’s headquarters also contained an empty room and there was no one to speak with or verify business dealings. When the scam was revealed, ACChain components began to disappear.
Another type of cryptocurrency scam targets new projects, capitalizing on the cryptocurrency community’s fervor for the newest thing. Over the past year, new tokens saw rapid gains thanks to hype and short-term momentum. Those investors then scoured the top gainers and trending assets in the hope of catching the next “meme coin” before its price takes off.
In a recent study, the number of fraudulent transactions in the crypto industry rose 79% year-over-year, to more than $14 billion. The rise in fraud was driven by the fact that few people were monitoring the currency. Its high price attracted scammers, who then sold off their holdings. Unfortunately, many people lost money through this scheme. ACChain scams are just the latest in a long line of common crypto scams that aims to defraud unsuspecting investors.
Rug Pulls Are Common Scams in Crypto
Rug pulls are low effort cryptocurrency coin projects that start out hot and then collect investor funds. Developers then abandon the project once it becomes popular, and they simply steal the investor’s funds. They usually use a legitimate cryptocurrency and create a liquidity pool to make it tradeable. However, some of these projects are scams, so investors should exercise caution. This article will explain why rug pulls are some of the worst crypto scams.
While the price of cryptocurrency may be rising, scam activity is increasing in conjunction with that price. However, scam activity remains rampant in 2022. Crypto projects that steal money from donors are often called rug pulls. While crypto scam activity can be difficult to track, the recent collapse of Turkish cryptocurrency exchange Thodex. Another prime example of a crypto scam that stole over $2 billion from investors. The alleged perpetrator is still unknown.
