Key Insights:
Ponzi schemes are scams that often lure investors with ultra-high or guaranteed returns over a very short period.
These projects rarely show their credentials or founder details to avoid the risk of getting caught.
A simple internet search about them could have saved a lot of victims from losing money.
When such ponzi schemes are on social media, they tend to populate their follower list with bots so that it seems genuine to real investors.
The most popular crypto ponzi scheme was One Coin, which lost $4 billion of valuable investor funds.
The first and most important rule for avoiding Ponzi schemes is never to fall for high returns. Greed has always been a factor in these schemes' use against unsuspecting users.
Most of us forget a prevalent thing in a race to earn that extra dollar. If something can consistently beat all the markets, why isn't everyone talking about it?
Several genuine projects, like Toncoin, Solana, and Bonk, gave several hundred per cent returns. A common trait uniting these projects was that they were well-known to everyone and had been extensively researched by thousands.
A Ponzi scheme could never have stood against such extensive research. Below is an example of a Ponzi scheme called Wo Token that scammed $1.1 billion out of its users, promising high returns.
It's very easy these days to create a high-quality Ponzi scam website and insert your scam links into it.
High-quality websites were considered genuine projects because they required considerable investment to build. However, AI advancements have allowed users to create stunning websites for less than $100. These fake websites are sometimes very tricky to identify.
However, even today, spotting a fake one is not that difficult. All you need to do is check for founder credentials.
Typically, Ponzi schemes need to list their founder details. On the other hand, genuine websites like DYDX below will have a detailed list, history and even LinkedIn profiles of the founders.
Your best friends for identifying crypto scams are Google, Bing, Yahoo, Brave, or even DuckDuckGo. Whenever you see a new project, it's best to see if major media publications have covered it.
Normally, with the launch of all genuine crypto projects, there is a very intensive marketing campaign. Chances are that if there is no media coverage of the project, the developers will be super lazy, or the project will be a scam.
Below is a Google search snapshot of Onecoin, the infamous ponzi scheme. Observe how top websites have covered it as a scam and how related search results are still filled with users who never suspected it.
Most crypto ponzi schemes have dubious and unverified social media handles. Even if they are verified, their social media activity is likely minimal.
Often, these handles use Twitter or Telegram bots to populate their followers list.
Whenever you see any crypto project with very few likes, shares, or comments, even if it has thousands of followers, chances are that it might be a scam. Though several genuine projects exist that have low user engagement, it's always better to be safe.
Nothing can be guaranteed when it comes to returns. Even the fixed money market funds that promise your guaranteed 2% annual returns carry many systemic and default risks.
However, only some know it, and this lack of knowledge helps crypto scammers get the money out of your pocket.
A crypto ponzi scheme often lures unsuspecting investors into higher returns that beat the market and guarantee returns. These scams also lure you by saying the returns would be possible even with a very short investment period, say, three days.
Below is a classic example of one such scheme with unnaturally high returns.
Even the highest-yielding defi protocol yielded a satisfactory return, and some obscure projects were done during that period.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.