Beware of Cryptocurrency Scams! By DailyCoin

• Cryptocurrency Ponzi schemes are being used more frequently around the world.
• This pyramid-type scam constantly needs to add victims to the “investment network.”
• The United States Securities and Exchange Commission (SEC) published a series of recommendations for detecting crypto fraud.

The tricks and frauds that are committed with cryptocurrencies are increasingly sophisticated, so it is not easy to detect them with the naked eye. Among these methods to scam the unwary with cryptocurrencies, Ponzi schemes, where the scammer shows victims profits that they will never be able to collect, stand out.

The Ponzi scheme has been used in the United States, Latin America, Asia, and Eastern Europe, and has already reached large investors from these regions. As the market for crypto assets has expanded, so have the scam networks that are permanently lurking.

In almost all cryptocurrency scams, the so-called Ponzi scheme is present. A very popular form of pyramid scam throughout the world, it operates by attracting money from investors who are promised that significant investments in cryptocurrencies will generate interest of up to 25% in a short time.

Generally, to gain the trust of the victims, the criminals pay the profits or interest as agreed. Although in reality, the money used to pay the generous returns does not belong to the criminals but to the new victims who are joining the scheme.

So the system needs to grow constantly so that the first dupes get their payments. After a while, the chain is cut and that is when the victims realize that they have been scammed. The person who caught them does not appear or makes permanent excuses for the delay of the new payments.

Ponzi Scheme with Cryptocurrencies

In the crypto universe, the creators of the pyramid scheme convince new members by showing them success: motivational conferences, social media advertising, high income, and dream lifestyles. After convincing them, they must put up an entry fee to the investor club and attract new seekers for easy profits.

The more people join the chain, the more the investor profits, theoretically. New investors are registered on the website managed by crypto scammers. The Ponzi scheme is based on trust, since the new investors are usually relatives or friends of the person who captures them.

In recent years, the cryptocurrency Ponzi scheme was established through memberships to differentiate it from more traditional multi-level or pyramid businesses. The promise of profit can be daily or weekly, through fictitious investments in trading or mining or any other cryptocurrency.

Through fraudulent websites that serve as a front for criminals, people see their profits increase every day. It is only after a while, when they ask the investment manager to reimburse the profits obtained, that they realize the fraud.

How Do Fraudulent Cryptocurrency Sites Operate?

It is difficult to detect fraudulent sites at first, so it is…