Although cryptocurrencies, such as Bitcoin, may seem to be new. I have been writing in about cryptocurrency scams for four years. Cryptocurrencies are legitimate, but scammers are increasingly taking advantage of the public’s fascination with cryptocurrencies to take old forms of scams and update them with a cryptocurrency twist. The perception of many in the public that cryptocurrencies offer an easy path to riches coupled with many people violating the cardinal rule of investing by investing in schemes that they do not understand creates a perfect storm for cryptocurrency scams.
The FTC recently obtain injunctions halting the activities of four men who had been promoting deceptive money making schemes involving cryptocurrencies. The four men, Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler also had their assets frozen while the case against them proceeds.
Dluca, Gatto and Pinkerton using the names Bitcoin Funding Team and My7Network used websites, YouTube videos, social media and conference calls to promote a scheme through which investors were told that by investing $100, they could achieve $80,000 a month in monthly income. However, the scheme was nothing more than an update of the old fashioned pyramid scheme. Pyramid schemes are disguised as purported businesses; however, if you carefully evaluate the business you will see that the primary source of profit for the business is in enrolling new members who pay fees to join the business.  The only profit for investors comes from bringing more people into the scheme.  In other words, the only way you can make a profit is by becoming a scammer yourself.  Like chain letters, pyramid schemes are doomed to failure because eventually you run out of people to sustain the growth of the pyramid.
Chandler, using a similar pyramid scheme, misrepresented to his victims through his Bitcoin Funding Team that their investments would double in 50 days.
As I have mentioned many times previously, you should never invest in anything that you do not fully understand. You also should not invest in anything without investigating the people offering the investments. In addition, as always, if the investment sounds too good to be true, it usually is. Cryptocurrency scams have gotten so bad that Google has announced that it will no longer accept advertisements for cryptocurrency investments beginning in June. Facebook has already banned all advertisements promoting cryptocurrencies due to the plethora of cryptocurrency scams.
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