How to identify if a cryptocurrency project is a scam?

In the cryptocurrency space, scams have been the focus since the ICO boom. Not too much has changed, except for a more diligent community.


If you've been in the crypto space for a while, then scams aren't all that strange to you anymore. Notorious projects such as Bitconnect, OneCoin and CentraTech have become so familiar to gullible investors, because they have been fooled by those projects, losing a large amount of money.

But how do we know if a crypto project is legal or just a scam?

There is no specific and exact method to determine whether a project is real or not. However, there are a few ways that investors can equip themselves to make the smartest and most reasonable judgment.

Types of crypto scam

Currently there are many different types of scams, so capturing and understanding them will help us prevent and timely prevent.

Exit scam

Unfortunately, exit scam is one of the best known scams for a reason.

During the ICO boom, exit scam became so popular. Founders will exaggerate about their project, and disappear as soon as investors hand over their money.

Typically, these types of scams are created under the guise of Ponzi schemes, taking advantage of existing investors to further expand the number of victims. Unfortunately, scams can be hard to spot if the marketer is a colleague of yours. Both OneCoin and BitConnect are the clearest evidence of the success of this trick, having raised $ 4 billion and $ 2.6 billion.

However, other tactics may also be used, as in the case of CentraTech, the company used the marketing services of Floyd Mayweather and DJ Khaled to sell its services. The case came to an end when both were accused with the SEC of their misconduct.

Exchanges are also the land that "nurtures" the exit scammer. Last year, CEO IDAX disappeared with user funds but there are still some who believe the death of CEO Quadriga Gerald Cotten is fabricated and most likely this is part of the exit scam.

The scam on Twitter

The Twitter scams often stem from an industry leader trying to get people to send crypto to them.

These scams don't necessarily target people in the crypto industry. Paris Saint-Germain footballer Kylian Mbappé has repeatedly been targeted by scammers for the purpose of using his name to serve their purpose, including his Twitter account being hacked. .

Phishing Scam

Generally speaking, phishing scam aims to get users to grant their access to scammers. In the crypto world, this could be the private key for your wallet or to be able to easily log into your account. The scammer will claim to be the official representative of a company or a legal project.

Recently, phishing scams have become a lot more complicated.

Crypto security expert Harry Denley recently tweeted a warning about the dangers of using a QR code generator for Bitcoin addresses. Instead of generating the code for the address you provided, they will generate the code for the address of the scammer itself and once the money is sent there, they cannot get it back.

Ways to spot a scam

Although scammer are famous for creating legal projects, there are some lessons learned from previous plots that can help you avoid similar pitfalls.

Who is behind the project?

The principles of anonymity and privacy are immutable in the crypto space, but when it comes to delivering money, it's better to know who you're dealing with. Research company, along with the founders and their leadership team. Check out their LinkedIn pages and search Google to find out if there are any suspicious signs.

You should also find out if the company is registered in a reliable regulatory environment. In some countries, company directors are required to disclose previous positions. Often, this information can also help a lot, helping us know if the company has previously gone bankrupt.

If you are being approached on social media, especially by those claiming to be related to other crypto projects or initiatives, then check your profile carefully. Many founders or project leaders will link to their social media channels at the company's website, so this is the easiest way to cross-check if they match.

Never give your private key to anyone no matter what they promise. If someone asks you to send your crypto to them for an attractive big profit, then chances are that when you send that money, it won't return to you.


The word "partner" tends to be thrown away in the cryptocurrency space, when successful projects rely on the reputation of well-known brands.

Some of them are harmless, such as many projects that claim to cooperate with AWS or Microsoft Azure, in fact, they are simply customers. However, in the case of CentraTech, the company was arrested when it announced its cooperation with Visa, which was rejected by a company spokesman.

In a true partnership, both parties will be willing to confirm the existence of the other. If a small project claims to partner with a more famous brand, then we need to look to see if this can be validated on both sides. If you don't have any information on the company's website, you can also search on Twitter or other social channels to see if such cooperation exists.

In the same way, celebrity endorsement cannot confirm whether the project is legal or not. In many cases, this information needs to be checked more closely. Following the collapse of CentraTech, other celebrities such as Steven Seagal have also faced accusations regarding suspicious crypto projects.

Press test

The crypto press is flooded with paid press releases or sponsored posts that haven't been revealed. Many projects will take advantage of this as evidence of their popularity.

As part of any in-depth exercises, it is necessary to carefully review the types of journal articles about a project to see if they are objectively written or published as part of a PR campaign.

While there's nothing wrong with PR, an objective third-party independent review will weigh more, which will help determine whether the project is authentic or not.

When is "to the moon"?

If someone tells you that a specific investment will yield a guaranteed return or the token will to the moon, your radar scam will immediately be illuminated.

Simply because there is no such thing as a guaranteed return, all of your investment decisions have a certain level of risk. This is more true in the crypto industry.

All this is about giving you honest advice - do your research before making any decisions.

You can't prove yourself completely fraudulent, but at least you can make scammer miserable, hard to cheat your money.

Hanh Bui

According to Cryptobriefing

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About My name is Nguyen Manh Cuong. I was born in a poor village in Ba Vi district, HA NOI province - windy and sunny land. Currently. Mr Cuong.
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