Last May, cryptocurrency project DeFi100 posted a message on the site stating that investors’ money was stolen.
Although the project has Denial Any tampering occurred, and he said that the message appeared due to a hacking of the website. But it was too late by then. And panic began to spread among investors.
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The DeFi100 problem is only a small part of the whole picture. But it is a reminder of the risks of investing in cryptocurrency.
Also, the idea of decentralization In blockchain technology, it means that there is no way to get the money back. New types of scams have emerged as speculators seek more opportunities and riskier bets.
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Types of cryptocurrency scams
The DeFi100 project is back in action, but rumors persist about what happened. The DeFi100 issue is one of a series of scams that cryptocurrency investors need to watch out for right now.
There are three types of risks Which cryptocurrency investors should beware of are: bad investments, hacked trading platforms, and outright scams.
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The most dangerous type of fraud
The first type is the most common, and apart from the leading cryptocurrencies, there are thousands of small digital currencies built on the blockchain technology. Trying to find obscure alternative currencies to invest in can be overwhelming for traders.
Another danger is misinvestment, as everyone thinks they have a revolutionary idea about investing. But many of them do not succeed.
One such example is the DAO coin, which was launched in April of 2016 with great fanfare. but it It disappeared by the fall of the same year. This is after an attacker exploited a vulnerability in a DAO smart contract, resulting in a loss of more than $50 million.
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Sometimes investors can be directly scammed. And theAccording Federal Trade Commission Financial fraud in the cryptocurrency market has reached an all-time high.
This is due to the increased interest in these currencies in the recent period, especially with the tweets of entrepreneur Elon Musk on Twitter.
The biggest scams
OneCoin was launched in mid 2010 and touted as an educational crypto trading service. It turned out that the OneCoin tokens that investors were buying were not based on the blockchain.
The founders managed to escape with approximately 4 billion dollars of investor money. He called it one of the biggest financial scams in history.
In 2019, the founder of PayCoin was sentenced to prison for 21 months. He ordered compensation to be paid to the investors. That’s after it was created His currency and presented to investors with the assurance that he had received $100 million as reserve capital. But there was no Spare. The project lost money 9 million dollars.
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Cryptocurrencies are the first choice for many
Despite the significant decline in the value of popular cryptocurrencies such as Bitcoin or Ethereum in the recent period, especially in last May. However, it is becoming more common than ever. And it still attracts a lot of investors aspiring to get rich and make profits.
This is especially true when internet celebrities feed these motives by tweeting about a currency or announcing an investment in a new currency.
Elon Musk, CEO of Tesla and SpaceX, has become a reference for many in making decisions about whether or not to invest.
As a result, many scams bearing his name appeared. According to the Federal Trade Commission, people impersonating Musk managed to defraud investors and get away with at least $2 million.
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