There are basically thousands of crypto coins on the market today, according to CoinMarketCap. Although many of these cryptocurrencies are supported by various platforms, some of them are crypto scams. Whether you’re new or familiar with the crypto market, you surely wondered at least once, “Is this coin a scam like some people say?” or is it’s a legit cryptocurrency project. In this article, we will talk about five ways that will help you to answer the greatest crypto scam question “How to spot a scam coin?”
What is a Scam Coin?
Many people have tried to invest in cryptocurrency but have been scammed out of their money. Perhaps they chose the wrong asset that appeared to be, or claimed to be, superior to legit cryptocurrency or wanted to get rich quickly without researching what they are getting into.
If you’ve wondered what a scam coin is, we have the answer for you. Shit coins or scam coins are fake cryptocurrency coins or tokens with no long-term worth. This form of cryptocurrency scam aims to convince a potential investor of the value of an unknown coin by requesting that they buy it. The fact that these fake projects have failed or have pulled off exit scams is no longer news, and that’s why it’s important to do your research well before moving forward with an investment.
Crypto Scam Cases
There are several crypto scam cases already that the entire world knows of. Here are three of the most high-profile crypto scams that happened in recent years:
OneCoin was a Ponzi scheme that Ruja Ignatova started in 2014 and which posed as cryptocurrency. Ignatova convinced people in over 175 countries to buy OneCoin tokens through premieres and attractive marketing, assuring them that they were part of something big and would become wealthy. Unfortunately, that “something big” turned out to be a huge con, making the OneCoin scam one of the most high-profile fake schemes in the world.
The Bitconnect scam (also known as BitConnect or bitconnect) was another Ponzi scheme that posed as an open-source cryptocurrency. Like many other frauds (connected to cryptocurrencies or not), Bitconnect claimed large returns of up to 10% (which is huge), and although the coin used in the scam was legit, the organization that surrounded it was everything but real.
Squid Coin Scam
Squid coin, a recently released cryptocurrency, turned out to be a massive rip-off, with its producers scamming the investors. Even though it had nothing to do with the Netflix series Squid Games, the creators took advantage of the similarities to pull the rug on many people. The scam coin started with a price of less than a penny, but in just a short period, it increased to $2860. Then, as you can see with the majority of such scams, it was worthless in a split second because the developers chose to cash out. The Squid coin scam happened last year.
How to Spot a Scam Coin
Before investing in a crypto coin, you must examine it carefully and check whether it resembles the following attributes. If it has these features, you will save a lot of money by just avoiding it. Here’s how you can spot a scam coin:
To avoid crypto scam: Explore Communities
Being careful is the most effective technique to protect yourself from a looming scam. Crypto is a digital product with all of the necessary information available on the internet, so keep an eye out for any questions about the legitimacy, history, or reports from other users. So, first, you need to see what other community members have to say about the coin on its website and social media sites like Twitter, Reddit, YouTube, and Facebook.
To avoid crypto scam: Check Up the Whitepaper
A whitepaper is available for every legit token, so look for the one the token you’re researching has. Whitepapers are documents that include all of the information you need to know about a cryptocurrency, which means the coin could be a scam if there is no white paper.
To avoid crypto scam: Keep an Eye on the URLs
In addition, legit coins have active Github pages and websites with correct URL spelling. This means you should be cautious if a coin’s Github page or website is empty and displays no evidence of activity.
To avoid crypto scam: Beware of “Guaranteed High Returns”
The offers on scam coins are simply too good to be true. They make exaggerated claims, such as guaranteeing massive, risk-free returns in the quickest period possible. The truth is that these projects cannot bring in money continuously because to offer fixed returns, a company needs a consistent source of profits.
To avoid crypto scam: Keep Your Wallet Safe
Keep your wallet and secret phrase (also known as a recovery phrase or seed phrase) safe at all times. Anyone who knows a wallet’s secret phrase has access to everything within it; therefore, you should never reveal it to anyone. Also, to avoid losing your money, try having two or more wallets where you store your coins.
Where to Find Legit Cryptocurrency?
First, CoinMarketCap, a reference website and tool that gives information on cryptocurrency price, charts, volume, and other data, is one place you should look because it shows legit cryptocurrency and companies. There you’ll discover anything from top currencies or low-cap altcoins to newly introduced coins. Second, Swapzone is another place to look for genuine currencies. We only list legitimate projects, so you can look for any legit cryptocurrency you’re interested in on our website.
Avoiding Crypto Scam: How to Exchange Legit Cryptocurrency?
You may now wonder how to trade legit cryptocurrency to expand your holdings. That’s a fantastic idea, and we can help you with it. Simply follow the steps below to put money in your wallet through Swapzone:
Step 1. Go to the Swapzone website.
Step 2. Select the pairing you want to exchange. For example, the BTC to ADA pairing.
Step 3. Input the amount of BTC you want to exchange for the other coin. Swapzone will bring you the best rates from many exchanges and show the number of coins you will get for your BTC.
Step 4. Click on the “Exchange” button, which will ask you to type in the fields the address you want your new tokens to be sent.
Step 5. Click on the “Proceed with the Exchange“ button, and Swapzone will show you the reviews of the exchange you choose to buy from.
Step 6. Wait until the deposit is processed by the exchange and the trade is done.
Step 7. If you want, rate the exchange partner and leave a review.