What is Fake Cryptocurrencies and how to identify them

“Dead Coins” And Fraudulent ICOs

New cryptocurrencies are often launched through Initial Coin Offerings (ICOs). An ICO, which is similar to an Initial Public Offering (IPO), enables companies to raise capital to launch a new coin or product. The ICO process generally entails creating a whitepaper describing the company and project, financial details, duration, and the number of digital tokens the project will retain, among other specifications. Investors can often buy into an ICO with cryptocurrency, and receive the token from the company in exchange.

A Crypto Scam Cautionary Tale: My Big Coin

My Big Coin is another notorious example of a fake cryptocurrency. The founder and principal operator, Randall Crater, was charged with defrauding investors by marketing and selling My Big Coins (MBC) on social media platforms.

The OneCoin Crypto Ponzi Scheme

Not to be outdone by the My Big Coin fiasco, the multi-billion dollar OneCoin scam seems like a drama made for the movies.

Don’t Get Faked Out By Fake Cryptocurrencies

Seasoned crypto investors almost universally remain on guard when investing in new projects and the ICOs associated with them. Anyone seeking to invest in a crypto project should be especially wary of promises of guaranteed returns. As a potential investor, you should inspect whitepapers closely, including the project’s stated objective. It’s also important to verify the project team members’ identities and credentials.

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