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Bitten by Bitcoin - A Preventative Guide to Common Cryptocurrency Scams

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So, you’re interested in the world of investing, we have all been there at some point or other. You’ve seen all the relevant movies (The Wolf of Wall Street, Wall Street, Rogue Trader, Boiler Room etc.) and you think this is where you belong. Part-time anyway...

Whether you’re a financial guru or the average joe, no one has been immune to the buzz generated by the emergence of cryptocurrency. Marketing, in-your-face advertisements, even your in-laws are proclaiming this as the new way to achieve millionaire status. 

While this market may hold some potential in propelling savvy investors through to that coveted standing, one needs to dissect the pros and cons. 

Emails

 I’ll bet that you, like millions of people around the globe, have received a handful of emails over the years stating, “you have won $/€/£ amounting xxx xxx xxx” and all you need to do is xxxxxxx. The statements may have changed but this is a common cryptocurrency scam that works like a charm - you sign into your account via a link provided and BOOM, they now have access to your account or private wallet. Pay attention to the email address and block them if possible. Never sign into your account or wallet via an email. 

Non-Existent Initial Coin Offerings (ICOs) 

Another scam that most people believe they will never fall for - an ICO that does not exist! Let’s face it - this market is unregulated and a veritable playground for all manner of common cryptocurrency scams. It can be difficult to ascertain whether the potential ICO is a working model or an idea floating around waiting for unsuspecting �donors.’ If you have a working knowledge of the market, viewing the company’s white paper will shed valuable insight into the offerings. If you’re new to this, see if there are reputable figures attached to the project. Should there be a lack of accurate, publicly available information regarding the company, including any media coverage, dodge this bullet. 

Pyramid Schemes

An oldie but a goodie that never fades. Pyramid schemes operate much the same using any product or tool. What makes cryptocurrency so dangerous is that it’s constantly evolving. Understanding the basics of blockchain can leave one dizzy, and in an ever-changing market, evolution waits for no man. Duping occurs in every market or business, and the complex nature of cryptocurrency knowledge and technology makes one believe it’s okay to understand bits and pieces since no one could possibly fathom it A-Z. This also makes an exception for typically used statements like “It’s a bit technical so let me handle your investment.”

Cold Call? No Call!

I’m surprised this one still exists, especially in this day and age but human behavior is beyond my powers of deduction. Companies dealing in cryptocurrency will never call you out of the blue. If you have the details of said company and �agent’, report them to your local securities exchange asap. That’s one call they won’t be expecting!

The world of cryptocurrency can be extremely exciting if you know your way around or have trusted counsel. Like all investments, knowledge is power, and you want to be armed to the teeth before diving into these types of investments. My advice? Do your homework and aim for extra credit. Take small steps and invest only what you can comfortably afford should you lose it all. Hey, it’s better to be cautious than homeless or bankrupt. Don’t fall for common cryptocurrency scams. 

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