Safeguarding digital assets shouldn’t be less than a priority. Cryptocurrency is a bewildering world, every second, a new strategy or product is launched. It might be difficult to save yourself from scams like pump and dump crypto.
As cryptic as it sounds, this scheme consists of a holder having a low-valued asset, encouraging others to purchase it at a higher price. On reaching a specific price objective, the scheme orchestrators take their share and elope before the cost goes down. As a result, investors are left with nothing in their pocket.
So, how to save yourself from such a crypto-investment scam? Well, I have brought here a handful of tips that might help you in the long run. Make sure you get them right because the crypto market is less merciful for beginners.
The Template Using A Pump Coin And Fooling Investors
Before extracting tips to save you from such a threat, you will first have to know the process. Irrespective of the fraudsters, the template of a pump and dump crypto remains more or less the same.
It all begins with creating a token and taking it as high as possible. The next step here is that the scammers crawl onto social media and start telling people about the things they do, sharing memes, and increasing followers to a height. By listing places such as CoinGecko or CoinMarketCap, they try to build a wide audience group.
On noticing a list of holders, there evolves the scam on billboards, buses, and literally everywhere you take your eyes. It might even elevate to a point where influencers are hired for promoting their token. The process, however, continues as the big exchanges are now visible to Binance or Coinbase, where there is an unbelievably large group of audience.
This financial fraud draws a line with other scams because here, the target is not on one person or group but on numerous people.
Primary Indicators
The biggest red flag of a person or organization carrying illicit fraud is identifying someone as an anonymous founder. However, there are perpetrators who insist on abandoning anonymity. 99 out of 100 scammers in a pump and dump crypto tend to carry this because they put their faith in anonymity. Also, it helps them to hide from liability and carry out activities that are not ethical.
If somebody reveals their identity, investors, as well as advisors, should research this person. At least, that’s what experts recommend. In the world of crypto, one must look up his/her personal information along with comprehending the token of the person issuing it.
What truly makes crypto susceptible to such a fraud is the fact that organziers take no effort in looking for an asset that’s thinly traded. Because they can create one themself. The only way to put an end to such a cryptocurrency scam is simply by conducting a little research and having some knowledge on coding.
There might be times when you will find no red flag in the documentation. In such a case, it’s better to roll your eyes on the cryptocurrency trades. You know the investment is safe when it is present on a well-renowned exchange. On further digging, you might have to look for other information into the order records.
How To Save Yourself From This Crypto Scam?
Cryptocurrency pump and dump is something very likely to happen if you are a novice investor. But the risks can be mitigated to a larger extent by simply including the right tips on-board.
Research, research and research
It is not very easy to recognize a pump and dump crypto. There might be no difference between a coin and a pumped coin on the trading chart pattern, making it vulnerable for scammers to increase its price 10 times. On buying coins at ICO or the “initial coin offering”, you will require to complete your research and trade only what you know about. The same remains on dealing with obscure altcoins.
Be cautious of everything around
Make sure you keep your eyes and ears about exceptional price escalations open while investing. Being careful with cryptocurrencies having a small-market-cap is the key to go long in the game. If you do not find any good reason for the surge in price, that’s just because there ain’t any. Be clear and think of investing somewhere else.
Don’t hurry
Time-sensitive offers and extravagant deals might simply lose your focus and force you to make a fishy investment. The key is to be skeptical of such offers. Avoid feeling pressured to purchase an investment without researching the background. A reputed company will always give you ample time and space to rethink about your investments.
Take opinion from experts
Unsolicited opportunities of investment might attract you, but are tough to identify. Before investing, it is always a better option to take a second opinion from expert investors. This can be professionals, a registered advisor or people who you might know. For special cases, you can rely on an accountant or a lawyer for genuine suggestions.
Report a fraud immediately
There are instances where victims have not reported investment fraudment just for saving themselves from embarrassment. But that’s not crypto-investing works. As soon as you experience an investment fraud, make sure to report it. This will not only save your future investments but also help other investors to take a lesson.
The Bottom Line
So, this was all about pump and dump crypto. With this article, I hope my readers understand how to save themselves from such investment scams. Your investment is a result of your lifetime savings, don’t let it go so easily. Thank you for reading. Let me know what are your thoughts on this.
