Crypto Scams and How to Protect Yourself
1. Celsius’ Crypto Pyramid:
- Scam: Celsius, a crypto lending company, promised high yields but filed for bankruptcy.
- Warning Signs: Unrealistically high returns should raise suspicion.
- Lesson: Research platforms thoroughly and be cautious of overly attractive offers.
2. Ukraine Rug Pull:
- Scam: The Ukrainian government redirected donor funds.
- Lesson: Even seemingly legitimate causes can be fraudulent; verify before donating.
3. FTX Collapse (2022):
- Scandal: FTX, a major exchange, lost $1-2 billion in customer funds.
- Risk Mitigation: Choose reputable exchanges, diversify holdings, and avoid concentrating all funds in one platform.
4. Blackmail and Extortion Scams:
- Scam: Scammers threaten victims with exposure of embarrassing personal information unless they pay in crypto.
- Prevention: Be cautious of unsolicited demands and report such scams to authorities.
5. DeFi Exploits and Rugpulls:
- Scam: Decentralized finance (DeFi) platforms suffer vulnerabilities leading to theft and rugpulls.
- Advice: Research DeFi projects thoroughly, check audits, and avoid risky protocols.
Remember, due diligence is crucial. Investigate platforms, verify claims, and stay informed to protect your investments.
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