Although cryptocurrencies, such as Bitcoin, may seem to be new. I have been writing in Scamicide.com about cryptocurrency scams for five 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.

A good example of what a cryptocurrency scam looks like can be found by going to this website touting HoweyCoins.   https://www.howeycoins.com/index.html

The bad news is that while HoweyCoins may appear to provide a lucrative investment opporunity, there is no such thing as HoweyCoins. It is a scam. Fortunately, it is a scam website that was set up by the Securities and Exchange Commission to serve as a warning to unwary investors about the dangers of cryptocurrency scams.

OneCoin is a cryptocurrency that was created in 2014 by Ruja Ignatova of Bulgaria.  Through a website and live appearances, she lured millions of investors around the world into pouring billions of dollars into her creation, which has been found to be nothing more than a Ponzi scheme where early investors were paid with the investments of later investors to make the enterprise appear to be legitimate and profitable.  Ultimately, as new investors dried up, the scam was uncovered and Ignatova who is a fugitive from justice has been charged with wire fraud and conspiracy to commit money laundering.

TIPS

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.  Due to the fact that bitcoins are totally unregulated by any government, they are a questionable investment.  Add to that fact, their digital character and its susceptibility to hackers and fraud and you have a dangerous investment at best.

Ignatova is just the latest in a long line of Ponzi schemers who make promises that are too good to be true backed up by an incomprehensible formula for investment success. You should always remember the prime rule of investing which is to never invest in anything or any investment strategy that you do not totally understand.  Some of the things to be on the lookout for in regard to cryptocurrency scams are promises of high, guaranteed returns on your investment, false claims of being SEC compliant, allowing you to invest using your credit card and pump and dump scams. For more information about pump and dump scams related to cryptocurrencies, check out the Scam of the day for April 11, 2018.

Specifically in regard to OneCoin, if someone had investigated OneCoin before investing, they would have learned that OneCoin was not listed on any crytocurrency exchange.  Its coins could only be sold back to the company and wallets for OneCoin that enable investors to transfer coins were not available.  These are all red flags to the fact that OneCoin was a scam.  In addition, OneCoin did not even use blockchain technology which is the basis of legitimate cryptocurrencies.

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