Warning Signs of Cryptocurrency Scams.

In an age in which Bitcoin took the world by storm and rose astronomically in value, enriching its early adopters beyond their wildest dreams, many people have joined the crypto bandwagon in the hope that they too will invest in crypto and become stupendously rich. Such enthusiasm has made lots of people to lose their hard-earned cash as crooks take advantage of their blind optimism to swindle them of their resources. Over the last decade, many scam cryptocurrencies have sprung up, luring investors into the project only to shut down after a while and disappear with investors' funds.

While there are indeed genuine cryptocurrencies, how can you, a potential investor, figure out those that could be frauds? Here are some checks you can do to try and stay safe from scams.

A. Verify the identity of the project team.
Head over to the "about us" section of the project website and do some research on the members of the team. It could be a red flag if the members have social media profiles that were newly created, or that are relatively quiet yet with thousands of followers and likes.

B. Promises of high interests and returns.
When a scheme promises fixed daily or monthly profit, or high return on investment (ROI), be on your guard. The cryptocurrency space is a very volatile area, and price fluctuations are erratic and impulsive. When you are offered guaranteed interest rates etc, it is a strong warning sign. If it sounds too good to be true, it probably isn't true.

C. Always read the Whitepaper.
The whitepaper has detailed information about the cryptocurrency, the philosophy of the project, and the roadmap to the attainment of the project's goals. Keep away from schemes that don't have a whitepaper. For the ones that have, ask yourself as you read: Is the concept meaningful, does it have a well laid out financial model for its economics, does it comply with verifiable legal and regulatory requirements etc? If you think any answer is in the negative, beware.

On a final note, be careful of coins that are overhyped and speculative. Try to verify a project's legitimacy before you put your money into it. These will go a long way in helping you stay away from dubious crypto coins and scams.