Top 5 Cryptocurrency scams you need to know about

Bitcoin, the most popular cryptocurrency in the World, was created in 2008. The mystery and intrigue of a new type of currency caused waves of enthusiasm across all divides. The creation of Bitcoin inspired many more companies to roll out their own currencies. Unfortunately, this also meant that many companies took advantage of this boom and created cryptocurrency scams.

For those who did not know much about cryptocurrencies but still wanted to invest in altcoins, the tactics that these frauds used were too advanced and scamming unsuspecting investors was easy. As word spread about cryptocurrencies, the bad name that scams brought along tainted their good reputation and governments wrongly accused Bitcoin for the frauds; and thanks to the scams, they outlawed all cryptocurrencies – good and bad.

Bolivia is one such country where altcoins are banned and recent reports claim that a mass arrest of 60 people was conducted. The 60 were allegedly said to have been giving out material on Bitcoin and could even have been attempting to scam citizens.

Now, we’ll take a look at the top five cryptocurrency scams that shook the community and made many people weary of investing in altcoins.

Onecoin

Being number one on this list, Onecoin is definitely the most famous and most notorious cryptocurrency scams in the World. Running through a private blockchain and controlled by Onecoin Ltd in Gibraltar the Onecoin scam was a token based on a Ponzi scheme. Due to a solid Facebook marketing strategy, the company managed to steal more than US$50 million in roughly a year of unconventional sales.

Onecoin’s main business was the sale of material for trading education and packages that were priced between 100 and 118,000 Euros, which secretly contained tokens for mining Onecoin

token in them. These materials were sold in Hong Kong, Bulgaria and others. The scam was first revealed in Italy then, later, China by the Italian Antitrust Authority who obtained an interim injunction to bar Onecoin Ltd. When caught, the company denied selling digital currencies.

LCF Coins

LCF Coins are currently in the pre-launch stage and are very popular in China – despite not having any form of social media or website. They have been promoting the digital currency by using Google forms and with products over 600,000.

Rothschild & Co, the firm that gives them financial advice, recently published a statement that indicated that this cryptocurrency was indeed a scam, and even went as far as to warning people not to invest and have trust in the currency;

They mentioned that this scheme seems to be a fund for investment with regard to virtual currencies and the ‘Internet of Things,’ and to pay out money in tranches depending on the time people have invested. This shows that the fund is quite similar to a Ponzi scheme.

Centurion Coin

As a ‘charity foundation’ Centurion Coin makes it to this list and thanks to Truffacoin, a website from Italy, its authenticity is completely zero. The MLM scheme masked by a Dubai based and registered company poses as a charity and was said to be donating over 5 million tokens to the market. The suspicious behaviour is underlined further because there are exactly 50,000,086,400 CNT pre-minded coins in the initial block during December; according to information on their website and explorer of their block.

Earthcoin

Although seeming like a genuine digital currency and even being mentioned on CoinMarketCap to convince you further, the questionable numbers are what keep the investors away. The market cap of Earthcoins is estimated to be $935,000 in addition to having 9,346,468,332 EAC. The developer auto-generated the first supply and, unlike what we are accustomed to, supply isn’t being generated over time by miners.

S-Coin

S-Coin is also called Coinspace and is similar in many ways to Onecoin, the most prominent being their game plan which was completely inconsistent. By selling more than 12,000 packages worth of tokens and without a solid economic plan, this is clearly a scam.

How to Protect Yourself against Cryptocurrency Frauds and Scams

Although we have listed 5 digital currency scams you have to remember that these are not the only ones. The best way to keep your funds safe is to know how to identify and avoid these ponzi schemes.

Stay away from ICOs, unknown companies and companies without adequate information. Ensure that information such as the creator’s names and team members are publicly listed and, if reviews give consistent negative feedback it best to be careful.