John DeMarr recently pleaded guilty to criminal charges related to his participation in a massive cryptocurrency scam that swindled close to 500 investors out of more than 11 million dollars. The scam was a typical cryptocurrency scam in which the criminals led by accused criminal Kristijan Krstic promised up to 200% gains in two to three months to be derived from crypto-mining. Krstic and 15 other defendants have also been charged by federal prosecutors with operating 20 other cryptocurrency scams in which they stole approximately 70 million dollars from their victims. In these scams, victims were provided false statements that indicated their investments were growing substantially although the truth is that nothing had actually been invested. It was just a large Ponzi scheme. Former action movie star Steven Seagal was hired by the scammers to endorse the phony investment scam. Seagal later paid $300,000 in fines for illegally touting the investment without disclosing that his was a paid endorsement. Seagal also later withdrew his endorsement when he learned that it was a scam according to his manager.
The Securities and Exchange Commission (SEC) has long warned investors about cryptocurrency related scams including investments in confusing cryptocurrency advisory and trading systems as well as cryptocurrency mining farms. Quite often these scams promise high guaranteed returns with little or no risk. 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 is that cryptocurrencies offer an easy path to riches coupled with many people violating the cardinal rule of investing by investing in things that they do not understand creates a perfect storm for a wide variety of cryptocurrency scams..
A good example of what another type of cryptocurrency scam looks like can be found by going to this website touting HoweyCoins.
While HoweyCoins may appear to provide a lucrative investment opportunity, 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.
As I have mentioned many times previously, you should never invest in anything that you do not fully understand. Cryptocurrency scams quite often involve complicated language and investment terms that is purposefully unclear in an effort to confuse potential investors from understanding the real facts. You also should not invest in anything without investigating the people offering the investments. You can go to http://www.investor.gov to learn about the licensing and registration status of someone offering to sell you investments. In addition, as always, if the investment sounds too good to be true, it usually is. Facebook for a time banned all advertisements promoting cryptocurrencies due to the plethora of cryptocurrency scams, but has reversed this position and now does accept ads for cryptocurrencies. Some of the things to be on the lookout for in regard to cryptocurrency scams are promises of high, guaranteed returns on your investment such as was done by DeMarr and Krstic, 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. https://scamicide.com/2018/04/10/scam-of-the-day-april-11-2018-new-pump-and-dump-cryptocurrency-scam/