Since the inception of Bitcoin (BTC), there have been a lot of cryptocurrency scam incidents and fake initial coin offerings (ICOs) that have stolen a ton of money from unfortunate investors. That’s why we advise all our readers to make sure they do their own due diligence before putting any significant amount of money into a block-chain based project.
So, how do you do that?
How do you avoid a cryptocurrency scam?
Listen – there is no sure-fire way to guarantee that the project you are putting money into is a legitimate venture. But there are some steps that you can take to maximize your odds of picking safe and reliable crypto companies.
Make sure you do your research:
- First and foremost, understand the project. What is it about this venture is so great that you would be willing to financially participate in its success?
- Definitely read the whitepaper – or at least reviews of the whitepaper from reputable online sources
- Check out the team. Are they even identified? Are they experienced? Are they diverse in their skills and have they succeeded in business ventures in the past?
- Read the roadmap to get an idea of when the products or apps related to each coin will launch
- Do a Google search for any past incidents related to each coin’s honesty with its investors
Sure, that sounds like it could take a lot of time – but 20 minutes of in-depth research could save you a lot of money at the end of the year.
But, the steps above only weed out an obvious cryptocurrency scam. What happens when a cryptocurrency company that meets all the above points, and seems super reputable, still misleads its investors?
Waltonchain (WTC) – an otherwise solid coin may have deceived its fans
Waltonchain (WTC) is a great example of a cryptocurrency that seemed to have a solid reputation and reliable brand – but just yesterday it got caught up in a pretty big Twitter scandal that looked a lot like they were swindling their followers.
The team behind the WTC coin held a Valentines Day-themed giveaway that ran from February 8 to February 27, where 214 lucky re-tweeters would receive 2.14 WTC. Five of those lucky followers would score an additional 21.4 WTC. Great marketing campaign, right?
Well, yesterday the Waltonchain official Twitter account tweeted out what looked a lot like a fake-crafted response from a fake winner:
The now-deleted tweet was a major faux-paus. It makes us think that the whole thing was a sham and that all the winners were chosen in a non-honest way (if there really were any winners). The company tried to do some damage control by saying one of its employees actually entered the contest and won, mistakenly tweeting their happiness through the company’s official Twitter account.
As one Twitter user pointed out, that excuse isn’t the strongest:
This video doesn’t prove anything. The code that is used to run this program isn’t shown anywhere.
The code could just be this:
winnersList = [list of premade winners]
for winner in winnersList:
This video doesn’t show they were chosen randomly.
— steks13 (@a1_x12) March 1, 2018
At the same time, however, there are a ton of Twitter users who don’t even care about the “incident” involving the V-Day giveaway.
It just goes to show that there are a lot of new start-ups that don’t necessarily have the best intentions with their marketing strategies.
But how could we have looked out for that? A cryptocurrency scam is easier to spot – but this company seemed solid.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.