Scam

Right here, amongst the real projects, lies this scam. It looks just like the others; it might be one of the others. How do you know this isn’t a real project?

The decentralized world operates with little to no regulatory oversight and whilst such a world might be idyllic on paper it comes with its own issues. Financial regulators exist to stop scammers preying on the weak and vulnerable in the financial world, in the same way security guards are placed in shops to deter shoplifters; but both never stop all of them.

The technological capabilities of blockchain have created barriers to prevent some scams but, just as good people always find ways to improve the world around them, malicious actors will always find ways to take advantage.

If it’s too good to be true… then it (unfortunately) probably isn’t true.

Scammers often target newer member of the crypto community as they’re less likely to smell a scam when they see one. This is why people and platforms are constantly reminding everyone of various security measures to try and help prevent them from falling victim to scammers. Examples of this advice include:

  • Never enter your mnemonic unless you’re recovering a lost wallet
  • Never give out your private keys

DYOR - Do Your Own Research. Is a cornerstone of operating in the crypto space. You can follow someone you trust but, at the end of the day, if they’re wrong the burden isn’t on them; it’s on you.

We have created this listing to show you what scams are like. They’re here. Right here. Right amongst all the other projects swimming about in the big sea of crypto. They often look very similar to legitimate projects and services. They usually act like legitimate projects and services. They very often sound and talk like legitimate projects and services. We have also created this listing to help you inform yourself of what a scam is.

What is A Scam?

There are two main types of scams:

  • Type A: Those trying to gain access to your accounts and take your funds.
  • Type B: Those trying to defraud you by making you voluntarily send them your funds.

Type A scams will often pretend to be a legitimate entity, such as a wallet provider, a DEX, a hardware wallet company, or anyone other platform you many hold your funds on. These can be thought of as smash-and-grab scams.

They will often pretend to be a member of a customer services team, or maybe of someone higher up the chain of command to give themselves authority. They will tell you that they are "looking out for you"; oh how nice of them! They might ask you for your mnemonic phrase, your password, or try to get to send your funds out of your account to “secure them”.

Just like with anything else your pin code, your safe code, or even you house key, don't hand these details over to someone you don't trust, let alone someone you don't even know. NEVER give anything to do with your funds away to anyone, the companies who's services you use will NEVER contact you in this manner.

Type B scams will act like a legitimate project that is chasing your investment. Often type B scams are noticed through unreasonable high return promises, a lot of fake followers on social media accounts, or a lack of detail or clarity on how their project will actually function.

Verify, verify, VERFIY. Always perform your own review of a project, don’t just jump into it because you heard someone say it’s good; even if that someone is a trusted loved one or your best friend; they could’ve been tricked too, no matter how smart they appear to be.


So What Makes a Scam Standout? Red Flags

Here we're focusing on Type B scams, these guys are here to play the long game with you.

Scams are identified by what people call red flags. Some legitimate projects can flick up one or two red flags, although this isn’t too common. Often, scams will tick many of the boxes below (these are not listed in any particular order and all bear similar weight).

  • Anonymous Team or Leadership: Some will chose to stay anonymous for legitimate reasons of concern but more often than not anonymity in who is running or developing the project is a cause for concern.

  • No Team: Simply, if there’s no one running or developing a project then where is it going? A ship can’t run without a crew.

  • Fake Team or Leadership: If the leadership or those apparently developing the project are fake then this project is definitely a scam! These “people” could have fake or dead-end social media links attached to them to try and prove their legitimacy in the hope that you won't click them. There are also website out there to help you check if people are real or not.

  • Poor Content: If a website or whitepaper is littered with grammatical and technical errors it could be a scam; those who care about their project succeeding would fix these things before putting them out there into the world.

  • Missuse of Terminology: If a project is throwing big technical terms or industry buzz words into every sentence then it’s likely a scam. Are these terms and words necessary? If they’re not then BING that’s a red flag.

  • Poor Website: In today’s world a website is a face of a company and if a website is not up to scratch then you should be cautious. If you were presenting yourself or your company online, would you not want to make sure your website was impeccable?

  • No Website: You’re starting a digital platform or using this blockchain technology, which exists entirely on the internet, without creating a website? Smells kinda funny…

  • No Whitepaper: Not having a whitepaper is a giant red flag. Whitepapers tell you what a project is planning on doing, how it plans of getting there and who is crewing that particular ship. Scams can a have whitepaper too, so if a project has a whitepaper it doesn’t mean it’s not a scam they're just trying harder than this guy.

  • Hype: Turn on the hype machine!! Nothing gets people buying into something like a frenzy, an influencer, or a celebrity. If a project is talking a lot but not actually saying anything constructive or backing it up with actions, or if they’re using a celebrity to promote their brand that has no product, then be VERY cautious.

  • No Product or MVP (Minimum Viable Product): Be very wary of people asking you to give them your funds before they've proven they can at least somewhat, or have intent to, develop anything. "It's just words" is a well used expression in society for a reason. Before they go to investors most companies produce at least an MVP, a basic platform with a little functionality, to show that they can actually achieve some what they say they're going to do.

  • Fake Social Media Following: If lots of people are following a project then it must be legit, right? WRONG! Social media followers can be bought by the thousands nowadays for not too much money at all. If a project has a big social media -twitter being the big one in the crypto space- following AND kicks up some other red flags then there’s a big chance that it could be a scam. There are website out there to help you check the legitimacy of social media profiles.

  • Promises of HUGE Returns: Everyone has seen what has happened to Bitcoin’s price in the past 5 year and many people are entering the crypto-verse looking for “the next Bitcoin”. Trying to find the “next Bitcoin” is like digging for Nazi gold in the Sahara desert with a teaspoon; you probably won’t find it. If a project or an individual is promising you 10x, or 100x, or 1000x your input then give them a nod and bid them good day. Trust us. You didn’t miss out on anything and probably saved yourself something in the meantime.

  • Fake Address: No one smart starts a scam and puts their real address on it. Often the address associated with a scam is copied from elsewhere and linked to the wrong company or in the middle of an office complex or industrial estate with no verification that it is the company it says it is.

  • Outsourced Community Management: A good team are usually a cohesive unit that communicates well between themselves and with their community. Building and supporting a community is considered to be a large element of many crypto projects and actively interacting with this community is considered to be a sign of a strong project. Many scams have been known to "outsource" their community management. This has the effect of putting a barrier between the development team and the community because the community management is not an actual part of the team. As a result the development team rarely, if ever, interacts directly with the community. The telltale sign of this red flag is the community manager always waiting for an update from the team to answer the community’s questions. Another red flag for this is the team never actually appearing in front of the community, be that in a video or a text chat, or even for a live AMA.

  • Missing Deadlines: Many projected timelines and roadmaps given my projects, both successful and unsuccessful, have been over ambitious. Missing a deadline is not always a cause for concern, however, real projects will communicate to their community before missing deadline and offer an explainer as to why they are pushing a date back. Scams, on the other hand, will miss deadlines and not say anything to the community, only reacting to their comments after the missed deadline: "oh yea... it’s only more two months. Sorry!". If a project is repeatedly missing deadlines, especially if these are simple deadlines then be very wary. It is also pertinent to check the roadmap after a missed deadline. Scams pay less attention to detail and will not update their roadmap as regularly as a real project, simply because they don’t care.

  • Fake or Paid for Media Sources: Projects can have an "As Featured In" section on their homepage. Scams will have this too, using it as a tool to legitimize their project to unsuspecting eyes who don’t go and check the validity of these items. This section of a website can contain well known, and unknown, internet names, including but not limited to: Yahoo Finance!, Investing.com, CoinMarketCap, The CoinTelegraph, Bitcoin.com, The CoinQuora, and cryptonews. This section may even contain quotes from the articles on these websites, but this doesn’t mean they’re legitimate. It is useful to click on these and have a look to see how legitimate they are. Some are not clickable at all, which raises this red flag. Others will have an article for you to navigate to. If you can navigate to an article then check to see if it says, either somewhere at the top or the bottom, "This is a sponsored listing", "Sponsored", "Press Release" or something along these lines. If this is the case then the people behind the project paid to get this post on this website and are then choosing advertising it as being "Feature In", you don’t pay to get featured somewhere, you’re good enough for them to seek you out. Another good clue for spotting paid press releases are when the piece starts with "CITY, COUNTRY —(Newsfile Corp. - MONTH DAY, YEAR)" or "CITY, COUNTRY, MONTH DAY, YEAR (GLOBE NEWSWIRE)" or something similar. Both Newsfile Corp and Global Newswire are platforms that can be paid to distribute press releases for you to news sites. These are then picked up and copied by familiar platforms such as Yahoo Finance! and CoinTelegraph.

  • Team Social Media Account Legitimacy: Along the same lines as the above some scams will have buttons for their team members social channels that don’t actually work. That’s a massive red flag. Some may have buttons that do work and these may take you to a social media profile that is brand new, be wary of this, especially if it is the whole team that have brand new social accounts. Some will take you to social accounts that seem legitimate, having existed for a few years. However, a search of their timeline can show you that the account was created back in, say, 2019, but they only posted once, or never, and then never posted anything until recently. This can signal that this account was created years ago and then bought by the now new owner to make its age legitimize the owner.

  • Partners Section: Who are the projects partners? Can you verify them? "Cardano" is never anyones partner (it is a public blockchain that anyone can use) and listing it as a partner is a huge red flag. IOHK do not partner with projects in the ecosystem, so having them listed as a partner is also a big red flag. Many projects, and therefore scams too, will list investment funds that have invested in them as their partners. Can you verify that this is a legitimate investment fund that has invested in projects before? Real investment funds will list their portfolio or who they have invested in on their website. Fake investment funds will either not have a website, or will have a very plain one stating that they’re an investment fund that has invested in "XX Blockchain Projects" but without telling you anything about who those projects are. That’s a red flag and this means its a red flag for the project that linked to them too.


Remember if it looks like scam, walks like a scam, sounds like a scam then -QUACK!!- it probably is a scam and much more in-depth research is required before you can confirm otherwise; in the meantime stay clear and warn others! Let them do their own research and see if they come to the same conclusions.


What to Do if You Think Have Been Scammed

When you realize that you’ve been scammed it comes with a terrible, sinking feeling; only the really lucky ones haven’t been there and many of those who say they haven’t probably have. So what are your next steps?

  1. Block the Scammers - Get them out of your life. There’s nothing you can do to convince them to “do the right thing". They know what they’re doing and the effect it has on people; they don’t care, and yes they do suck because of it.

  2. Know That This Too Shall Pass - Like with most things, this isn’t the end of the world. If you’re feeling particularly hard hit by it please reach out to a friend, family member, or professional who understands; even if that friend is on the internet. Having someone hear you is much, much better than constantly berating yourself in your own echo chamber.

  3. Report the Scam - Tell your friends, tell eveyone! Publicize these disgusting people's actions. Yes this involves own up to being fooled but it's best for everyone if we all look out for each other (sometime you don't even need to say that you got caught if you don't want to). To go along with this there’re multiple website out there that list scams to keep people aware. This is the Cardano Fraud Detection Bureau, this website is where you can upload the wallet addre of the scammer, and this document contains links to the official agencies to contact in multiple countries around the world when you find a scam.

  4. Don’t Look for Recovery - This is why we blocked the scammer. Those looking to help you recover your funds are often looking to profiteer from your misfortune. They can’t always be trusted, and such recovery is close to impossible in the real world.

  5. Finally: Learn From the Experience - If life teaches us anything it’s that we learn on every step of the journey. This is just another step along the road, and now you’ve experienced it you will definitely be cautious next time!


Popular Scams

Whilst we covered two types of scams above, and posted red flags, there are other types of scams you should be wary of. App Store Wallets and Telegram scams.

App Store Wallets

These are VERY POPULAR SCAMS.

Some wallets have been designed as smart phone apps by their developers and have been placed on the applicable app store(s). Some of these may also be available for desktop as computer programs or as browser extensions. Other wallets have only been designed for desktop use, be that as computer programs or browser extensions.

Scammers have long been mimicking wallets that are only available as desktop or browser extensions, creating fake versions of them and uploading them as products to various app stores. The most popular wallet to fake is Daedalus, the official, full node, Cardano wallet from IOHK. Daedalus is not available as a mobile app. Always check with the wallet's official website before downloading anything. If possible, the best practice is to follow the links from the official website to the app store to download the wallet.


Telegram Groups & Admins

These are VERY POPULAR SCAMS.

Anyone can take to Telegram and create a group with a name that is very similar to a popular project and their official Telegram channel. This can be as simple as:

  • ProjectX_Official
  • ProjectX-Official
  • ProjectX_OfficialChat
  • ProjectX-OfficialChat
  • ProjectX-Official_Chat

All are very similar. So how do we know which is the real Telegram channel of ProjectX?

To avoid falling into the scammer's nasty traps always use official sources, i.e. ProjectX’s website, Discord server, or other social channels, to find and VERIFY their Telegram channel. As above, scams usually have names that are almost identical to the official Telegram channel, or they might be posing as a “Community Group” based around that project. Whilst these do exist they are few and far between and true ones will most likely be endorsed by the project themselves. If in doubt about any community groups ask about it in the official Telegram group or on the project’s Discord server and have it confirmed by a moderator or admin there.

Another common Telegram based scam is a little more devious. A malicious actor will enter into a project’s official Telegram channel and find out who the administrators are. They will then appropriate the handle and image of an administrator and begin messaging group members pretending to be that administrator and attempting to befriend and scam those members. This can go as far as the scammer creating usernames that are incredibly similar to those of the administrator so as to try and fool those that might check the admin’s username. Many Telegram group administrators will have something along the lines of “Will NOT Contact You First” in their handle so as to try and prevent these scams from working.

If you get contacted by a telegram group’s “administrator” go into the group and find that actual administrator (identifiable by the “admin” tag) and see if the conversation they just “started” with you appears in your messages together. If it doesn’t then someone is targeting you for a scam. Message the administrator about this person, providing them with the handle of that person so they can be removed from the group. Your community and the administrators with thank you!

A project’s official Telegram channel will often announce when someone has made a scam copy of their Telegram channel so that everyone is aware of it. Maliciously, scam Telegram accounts will spin the myth that the official Telegram channel is a scam. Again, VERIFY your sources and only get the official Telegram from official sources. Even if you friend or loved one directs you there VERIFY it through other official channels. If they gave you the right one woohoo! If they didn’t you just might’ve just saved yourself and the other person from being the target of a scam.

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