Scamcoins (Scamcoin) are fake crypto-assets created to make money for their creators while stealing money from people who back and invest in the coin. Coins created as “get rich quick schemes” by their developers are referred to as scamcoins. These coins usually have certain properties, such as clones of coins that already exist or are being mined before.
The existence of scamcoins is one of the main reasons why many crypto assets that exist today have the potential to become worthless. In other words, when someone creates an unauthorized crypto asset to steal money from people, they have essentially created a scamcoin.
Types of Crypto Asset Fraud
In general, crypto-asset scams fall into two distinct categories:
- Initiatives aimed at gaining access to the target’s digital wallet or authentication credentials. This means scammers are trying to obtain information that gives them access to digital wallets or other types of personal information such as security codes. In some cases, this even includes access to physical hardware.
- Transferring crypto assets directly to scammers due to impersonation, fraudulent investments or business opportunities, or other malicious means.
What Claims Might Be a Warning Sign of Potential Crypto Scams?
According to the Federal Trade Commission, look for high claims like these to help find companies and people to avoid:
- Guarantees that you will make money: do not believe such promises that indicate fraud, even if there is celebrity endorsement or testimony, as these can easily be faked.
- Big payouts with guaranteed returns: “Guaranteed” returns are a big red flag.
- Free money: Whether in cash or in the form of crypto assets, the promise of free money is always fake.
- Big claims without detail or explanation: Be very skeptical about such claims.