Crypto Academy/Season 3/ Week 6 - Homework Post for Professor [@yohan2on] || CryptoScams and How To Avoid Them

What are crypto scams?

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A scam can be defined as a misleading means or scheme applied to cheat a person on something, in most cases that something is money.

Therefore crypto scams are when fraudsters/ hackers create various deceptive means and using different aids/tools to rob peopleq off their crypto assets. These hackers use both outmoded and modern technological tactics and schemes dispossess people of their cash and crypto assets. Millions of people and crypto investors have been scammed, and has lost so much money to these scams.

Forms of Crypto Scams

Giveaway scams

What some these hackers/fraudsters do sometimes is to pose as a popular crypto investor or an influencial entity which could be a celebrity claiming that they can help the upcoming investors multiply their coins. These hackers promise the smaller investors that they'll give them coins if they send their (smaller investors) coins to them(hackers)
The plan is that any coin sent to them by these smaller/upcoming investors becomes theirs and they block all means communication between them.

Fake Crypto wallets

Hacking of crpyto wallets is the only way these hackers lay their hands on people's private keys . They also create fake ones and sell them in app stores or online. When a person installs and uses these wallets, the hackers save the digital keys and get ready to loot any coin stored inside.

ICO fraud

An ICO(Initial coin offering) can be seen as the launching of a new crpyto currency.
There are two types of ICO fraud

• The hackers vreagy a fake coin, some what of a new altcoin and launch to create a big fuss making lots of investment promises so as to attract investors. When people invest in this coin project, the hackers just Pocket the money without selling any actual/real coin.

• In this one the hackers tend to spoof a real coin that is having a real ICO. They generate fake social media accounts and websites which they use to attract investors, telling them they're having a presale offer (scam).

• They trick the investors into thinking it's an opportunity to start off early with the real coin, these investors sometimes send money to them directly not knowing they're scammers.

Make your research on any crpyto scam

Pincoin

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The PINcoin was a Vietnamese based project. It was launched on 12th of January 2018. This project was a ponzy scheme. The PINcoin forged a a professional White paper and a well planned road map to make them look genuine, thereby perfecting their plan.
They started off with huge promises, the PINcoin started off with huge promises, they promised to offer eight block chain products, they promised to give their investors a 48% monthly return. With all these exciting promises which seemed to good for investors to resist, the scammers were able to dupe over 32,000 people and used their ICO to make over $660,000,000.
They fulfilled their promise of giving their investors 48% monthly return, bit after making the first payments the PIN foundation launched another coin; iFAN. They started paying their investors in iFAN token and this coin appeared to be totally useless because no exchange platform traded it.
This caused their investors to panick in anger and when they visited the company offices, there was no one.
After several reports, six government ministries including the police was oredered to investigate the case by the Vietnamese prime minister. The 7 masterminding people were discovered but it was already too late, they had fled the country.
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(2) To what extent have crpyto scams affected the crpyto space?

Crypto scams have really made negative impacts that has affected the world of crpyto.
Nowadays, most people no longer get interested or want to be involved in anything relating to crpyto due to risks and fear of being scammed. Some find it difficult to invest no matter how genuine the coin is proven to be mostly because they don't want to get scammed or they have already been victims of crpyto scams.
Some private institutions, countries and government agencies have even placed a ban and restrictions on crypto currency due to high rate of scams.
I believe if these scams were minimal or subdued, then the crpyto space will be skyrocketed into something big because there will be more investors as a result of lesser risk.

(3) Will regulations in Crypto add value to the Crypto space?

The Crypto space has attained this height were it is today without being regulated. First of all what is this regulation. In simple words, regulation as concerned to crypto is the involvement of government in the daily running of crypto a activities. This implies that government will now be aware of what anyone transacts and it may begin to shift from an ideal decentralised system since anyone suspicious transaction can be spotted down to the both transactors.

What this simply means is that firstly, Cryptocurrency will for the first time have the backing of government authorities and will now be viewed as a fiat equivalent. This will in turn motivate more people in their masses to start to invest into crypto since it will now have government backup and so their will be a reliable body to hold. Crypto space regulation would be a break through for cryptocoins although it will discourage people who love anonymity and might lose a few market cap but in total, it will surely gain more.

Regards to Professor @yohan2on