There’s not much more risky than crypto markets. Yes, there are high risk stocks. Yes, there are high risk bonds, believe it or not. Yes, there are high risk property investments (also believe it or not).
Most asset classes have an element of risk.
Crypto is one market that — at least for now — seems to carry more risk than any other. And that’s because there is no regulation. You can be a YouTube punk with 180,000 followers and you’re allowed to recommend crypto.
Any halfwit on Twitter can pump a coin worth nothing, with no volume. You can give advice with barely six months’ experience, and barely out of high school.
That’s exactly what’s happening. And the scary part is people are following the advice of these lunatics.
Often they’ll put a ‘disclaimer’ on their videos or tweets. It’ll read, ‘this is not investment advice, I’m not an investment advisor’. But they’ll go one to give their views, opinions, and influence to anyone who will watch. And none of them have any accountability when it goes wrong.
The biggest example of this has been the BitConnect debacle.
This is nothing short of a Ponzi scheme. And there are people all over social media pumping this ‘crapcoin’ for all its worth. But the only people really getting benefit are those social pumpers.
Everyday people getting involved with BitConnect did their dough this week. When most crypto values were correcting, BitConnect was properly crashing. Down 96% at one point.
The idiotic thing is today it was ‘up’ more than 300% at one point. Which means some very, very naïve people were buying BitConnect. If you haven’t figured it out by now, BitConnect is nothing short of a scam.
But in this crazy crypto world, there’s no accountability. Pump a scam and you can get away with it.
Too many people are. It’s damaging lives. And it’s doing reputational damage to the wider community.
This is what a crypto scam looks like
So what are some of the things to look out for that scream ‘scam’?
I’m going to show you a couple, to help you look out and keep yourself safe.
For instance today there was a public sale for a new ICO project called Mobius. Part of this public sale required Stellar Lumens (XLM) to be sent in, in return for MOBI tokens.
However, during the sale there were a few problems. The site wasn’t loading. The contributions were showing errors. Frankly, it was pretty frightening for a lot of new people to this ICO market.
But for those of us that have been around a while, well it wasn’t a huge surprise. Sometimes these issues can plague a very popular ICO. And to honest, no ICO is perfect. Still in my view it’s one of the best places to supercharge your crypto holdings there is.
Nonetheless, the Mobius project is a real project, with potential. But during the sale today there was a lot of ‘fear of missing out’ (FOMO) going on. This was heightened because of the difficulties with the sale.
The Telegram chat group for Mobius was going NUTS!
There was swearing, abuse, there were spam messages, people were losing their minds. Exactly what not to do during an ICO. But none of this was the dangerous part.
Actually falling prey to the FOMO is part of the scam…
We saw a few posts from a user called ‘Nikolas’. It looked like this:
[Click to enlarge]
Now if you didn’t really know what you were doing then this might appear legitimate. But there are warning signs all over this that prove it’s a scam.
First off, the user Nikolas is not an ‘admin’ of the Telegram group. Next, they’re saying to send ETH to an address. This part of the sale only required XLM and not ETH for the contributions.
Also at the top you will see clearly a pinned post that says Mobius was being targeted by scammers. The pinned message also says the project will never send out an address via message or email. Yet here this Nikolas is saying this is an address to send to.
All signs here clearly indicate a scammer.
Millions in scam funds
Now I’ve checked that address on the Ethereum blockchain. And thankfully it looks like no one from the sale today sent ETH to that address. But someone has at some point. There are two ‘IN’ transactions to that address totally 2.68ETH.
At current prices that’s $3,612. Not a huge haul, but still a few thousand these scammers have in their kitty. And if you think about the number of people that try this on across all ICOs, the figures could really start to tally up.
Assume that across 100 different ICOs scammers make off with just 10 ETH per token sale. That’s 1,000 ETH ($1.348 million) that scammers could be getting away with.
These attempts are playing on peoples’ crazy FOMO. When you get swept up in the manic nature of an ICO sale it’s easy to lose your head.
What you must do is keep calm and stay smart. If you’re going to contribute to ICOs on your own, you need the expertise to spot scams. You need the confidence to send your contributions to the right addresses. You need the guile to remain calm even when it appears you may miss out.
In fact missing out on an ICO is good for the soul. It builds resilience. It makes you very quickly realise you simply can’t get into them all. I’ve missed out on plenty of ICOs before. And some of them have gone on to deliver 10 times returns or more.
But you can’t get hung up on ones you miss. And you’ll fast realise there are plenty more opportunities. Being able to prevent FOMO and know how to identify scammers is part of the territory.
You need to know that this isn’t a game for rookies. You need experience, and confidence to properly navigate this world.
With that you can take it on headfirst. Without it, well, you’re only putting yourself at risk.
Editor, Secret Crypto Network