Crypto Academy / Season 3 / Week 6 - Homework Post for [@yohan2on] …Crypto Scams and how to avoid them

1- What are Crypto scams?
Make your research on any Cryptocurrency scam. (Attach a few references to the news surrounding that scam crypto project)

Crypto scams are fraudulent transactions with someone. At present crypyocurrency is being stole from many by crypto scam. Those who are new to the online world are easily exposed to such scams. Those who are a little clever in dealing with nature online understand such scams and do not fall into the trap.

Crypto scams can be done in a variety of ways. But scammers usually complete such scams by showing greed of the users. Because we all have greed for half and scammers take advantage of that opportunity.

There are many types of crypto scams. Which is very important for us to know. If we have a good idea about the types of crypto scams, we can easily keep ourselves safe from such scams. Below I have discussed a few types.

Types of Crypto scams

1- Imposter Websites

This is a very well-known scam technique among crypto scams. Here scammers create a website like the real exchange site and then they wait for the user to come to it. Such websites are made exactly like the original website. They try to confuse the users by changing only one digit. The imposter website is created by adding some new digits to the URL. For example, the URL of the Houbi exchange https://www.huobi.com/en-us/ can be added to the end of an additional i https://www.huobii.com/en-us/ website.

2- Fake Mobile Apps

Currently the mobile app is very popular. Everyone feels more comfortable using the mobile app. So scammers have taken advantage of this and made many fake apps in the Play Store. In these, users download without realizing it and lose by depositing crypto there. This is how scammers stole cryptocurrency from users through the fake mobile apps.

3- Through Social Media Updates

Everyone is very active in social media. So scammers take advantage of this. They give false updates from different fake accounts and provide junk links to the users. Then it shows different types of temptations and tries to steal the private key of their wallet from the users. Many foolish users give their private key and lose cryptocurrency.

4- Scam by Emails

Email scams happen all the time. Scammers greedily send various emails to users and ask them to click on the link. Foolish users fall prey to scams by clicking on them. This is how scammers stole cryptocurrency from users.

Source

Bitconnect Cryptocurrency scam

Bitconnect was a big ponzi scam. Bitconnect was an open-source cryptocurrency. It was released in 2016. A scam of 3.45 billion USD was stolen through this scam. It started in 2016 with high hopes of users but ended on January 16, 2018.

Those who invested in Bitconnect were given daily profit according to the amount of their investment. It was interesting to give profit here 1% compound interest was given daily. It is almost impossible to make everyone profitable.

In this scam, Bitconnect went to the top 20 cryptocurrencies. Which is a huge achievement. But the problem started when Bitconnect's price crashed 92% on January 17, 2018. That's when lightning struck those who had invested in it. Many people become exhausted by investing in it. This is how Bitconnecy spam came to an end.

Source

Reference links of Bitconnect scam

1- https://au.finance.yahoo.com/news/45-bn-lost-5-biggest-crypto-scams-of-all-time-215921732.html
2- https://en.wikipedia.org/wiki/Bitconnect

2- To what extent have Crypto scams affected the Crypto space?

Crypto scams are affecting the Crypo space strongly. Because Crypto is a new concept for everyone. It is still illegal in many countries. People have not yet fully embraced it. It has been declared illegal in various countries. But in response to people, there is a lot of trading in crypto exchange sites every day. But crypto scams call into question its growing popularity and people are confused as to whether they will invest in it.

Crypto scams usually reduce trading volume. Also then people do not want to invest in it. People do not dare to invest in legit cryptocurrency projects because of a scam.

I have tried to point out below how crypto scams affect crypto space:

Reluctance to invest in crypto space

The biggest effect of crypto scams is the decrease in human investment in Crypto space. People lose confidence in it due to various scams going on in it so they don't want to invest here anymore. They tend to think that where project scams have started, there may be more scams. In this way, they also think that legit projects are scams.

Affects on cryptocurrency’s price patterns

Crypto scams have a huge impact on the price of other cryptocurrencies. If the news of such scams goes viral, the price of a cryptocurrency goes down a lot. After the Bitconncet scams in 2018, the price of the cryptocurrency was affected very well.

Decreased trading volume

After crypto scams, the trading volume in the exchange sites tends to be less. Investors are afraid to invest large sums. Because they are aware of a crypto scam that is making them think a lot. When the trading volume decreases, its effect can be seen in the crypto space.

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

Yes, definitely regulations in Crypto will add value to the Crypto space. Regulation in the Crypto space will helo the crypto investors. Regulations are very important in the crypto space to make investors feel more comfortable because cryptocurrency is much more volatile. So without proper regulations, more investors will not be available here.

Novogratz says, "We need some regulation" he also says, "That's an unpopular opinion in crypto circles, but if you want to have institutions join the revolution, you need some regulation."^Source.Cryptocurrency is currently a revolution. Those who have not yet joined the revolution will fall far behind. From here we understand that if we want to join the crypto revolution then Crypto space regulation is very important for us.

If you bring rules and regulations in the crypto space, you can observe all the transactions here. This will make it easier to catch those who scam. It will be possible to avoid unwanted transactions. So the regulations are very government Crypto space.

At present many people are hiding their money in Crypto with tax evasion. As a result, the government is not getting any tax from them. So if regulations can be brought in the crypto space, everyone's interest in crypto will increase more than before. It will then be possible to use it as an alternative to money and it will add value to the crypto space.

Considering the above points, it is understood how much regulation is needed in crypto space. It can be said that Regulations will add value to the crypto space in many ways.

Conclusion

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Today's lesson describes crypto scams very nicely. By doing homework task, I got a lot of information by researching online about the Crypto scams. Professor also discussed how to avoid them. I have tried to describe the Bitconnect scam in my post. Besides, I understood the importance of regulations in the crypto space.

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Thanks for reading my post.

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