Introduction

Hello every one, it is my pleasure being a part of this weeks lectures by Prof. @yohan2on, giving good insight into what crypto scams are all about.

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1. What are Crypto scams? Make your research on any Cryptocurrency scam.

The emergence of blockchain technology which is the foundation of cryptocurrencies has really revolutionize some part of the world where it is embraced.

But then, every good thing must always have some attacks.

Crypto scam are tricks by attackers to steal the funds in the wallet of crypto users. This tricks has led to the lost of funds of so many persons. Some persons fall into this trap because of greed, some fall in because of ignorance.

The decentralized nature of cryptocurrencies has made so many scammers bring up ideas on how to defraud people of their crypto assets. Some of the popular crypto scams are;

ICO scams : Every new crypto uses the initial coin offering to publicize and market their project so as to get investors to know about them. Scammers use the ICO method to scam people of their funds. What they do is first launch the project, making it look so rewarding so that investors will troop in. When investors sees such glittering projects, they will now swap their crypto like ETH, BTC, XRP ADA etc for the project's token. When the scam project owner sees that some good number of investors has invested their assets in the project, they move the invested assets to another wallet and their glittering project begin to go off lime light.

Advert Scams: This scam is mostly carried out by running ads on social media, YouTube, and most times on air. Scammers ensures that they advertise these their scam project to the extent that it looks so convincing and real. But after investors pull in their resources into the project, they do away with the invested funds and that ends all the publicity they were always showing.

Digital Exchange Scam: Most of the scammers create exchanges and use it to sweep off cryptocurrencies. They furbish this their exchange and ensures that crypto holders are convinced that their exchange is genuine. When crypto is sent to the exchanges, the sender gets robbed of their asset.

Phishing Link: Another scam strategy is the use of phishing links to scam people of their assets. They offer so attractive rewards to crypto holders, leaving a link for them to click and claim the rewards. When persons they sent this link to clicks on the link, they will demand for the keys of the persons wallet and if the person ignorantly discloses his or her keys, they use the keys to access the persons wallet and sweep off the funds there.

Fake Wallet Scam: Scammers develop digital wallets and update them on google playstore. They make the wallet look so similar to the original wallet everyone has been using. If someone doesn't know and downloads this wallet and moves his or her funds there, that ends the existence of the funds in that wallet. It is ideal to download any digital wallet from the official website of the wallet developers.

Research on Crypto Scam

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Confido coin is the scam coin i wish to talk about in this task.
When the coin first came to lime light, the project owners claimed they were smart contract developers who will serve as escrow between traders.
They made their ICO on a platform known as Tokenlot and they succeeded in raising about $375,000 from investors. They gave investors a token called Contract for Difference tokens which traded at $1.20 in the coinmarketcap.

When the Confido project developers made away with the funds they raised, the contract for difference token dripped to 2 cent.

Before the Confido founders disappeared from the surface of the earth, they deleted all their social media accounts and even disabled their official website.

The Tokenlot platform which hosted the ICO of Confido when interrogated said that the Confido owners had provided every reliable information the Tokenlot exchange demand for coin listing.

The CEO of Confido, Joost van Doorn till date has disappeared and is nowhere to be round.
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2. To what extent have Crypto scams affected the Crypto space?

Cryptocurrency being a rewarding and secure project is supposed to be accepted globally but the scam cases imposed on it by scammers has led to the following effects on the system;

• A). A lot of countries, because of the scam stories and news they have been receiving about cryptocurrencies has ban the use of crypto in their country.

• B) Crypto scam has also made so many investors who were once victim of scam to wash their hands off anything investment in the crypto space because of Fear of Missing Out (FOMO) or being scammed again.

• C) Crypto scam has increased the risk of investing in cryptocurrencies. Investors before now were well aware of the volatility risk involved in cryptocurrencies and they were much ready to endure it. But the scam has added more risk to the ecosystem.

• D) Crypto scam has ripped off the trust of so many from the crypto ecosystem. Therefore, while some are embracing the system as a new technology, some are rejecting because they have been victims of the ill treat of the scammers.

3. Will regulations in Crypto add value to the Crypto space?

Yes, regulations imposed on crypto will add great value to the crypto space and also devalue the ecosystem.

Regulations Adding Value To The Crypto Space

Regulations on the crypto space will have cryptocurrencies restricted from persons who are found or reported to be involved in any fraudulent act.

The regulations will also give investors assurance of the security of their asset in that it will both protect them from scams and also help them in the recovery of their asset if lost because traceability of where the funds was transferred to can be possible, and the wallet of the scammer put under scrutiny till the funds are returned to the rightful owner.

It will also give people more trust in investing their asset in a particular crypto asset.

The volatility of some crypto will be managed and put under control.

Regulations Devaluing The System

The initial aim of blockchain and cryptocurrenceis was for it to be decentralized and if regulations is imposed into the ecosystem, it will alter the decentralization purpose of crypto.

Privacy of individuals will be meddled with. Individuals will not be able to make so many decisions on their own.

There will be a lot of verification processes before transactions are allowed to pull through.

Conclusion

Crypto scams are very rampant in the crypto space , thereby making so many persons to lose their funds. But then, users can always avoid this scams by making thorough research on any crypto asset launching ICO, not disclose the keys to any third party, be careful of the exchange they trade on and take all necessary precautionary measures to be on the safe side.

Regulations imposed on the crypto ecosystem simply means deviation from decentralization to centralization which is never the purpose of the emergence of the blockchain technology. Therefore, the decentralized nature of the system should be allowed to prevail and users should be on guard and protect their assets as good risk managers.

Thanks for having me.
cc:
Prof. @yohan2on