There have now been many examples of cryptocurrency and NFT scams and they aren’t just with smaller sites, even some of the biggest sites in the world have been found to be fraudulent and with recent developments turning towards celebrities who market those websites being targeted with lawsuits, are we starting to see the end of the crypto bubble? Perhaps not but it will in all likelihood lead to some real legislation and stringent testing coming in to ensure that these companies who are dealing with billions of dollars are doing so responsibly.
Cryptocurrency Scams
Trading scams from cryptocurrency websites are rife at the moment with the most common method being the Ponzi Scheme. This is when a site takes all of the deposits from their customers and money is taken out by either the owner or senior employees and then other customers money is used to fund withdrawal requests. Eventually when enough withdrawal requests happen at the same time there isn’t enough money to pay everyone out and this is when the whole site collapses like a house of cards with the customers being the ones who lost out. As this is happening all too often there are now specialist investment fraud attorneys who will help you to try and get some of, if not all of your money back. Other common scams revolve around a website itself being copied and presented as the real version in order to steal customer login and bank details. This is known as a phishing scam and typically occurs when people open fake emails or text messages.
NFT Scams
An NFT is effectively a digital item that you can own and its ownership is proven via blockchain technology. NFT scams are slightly different to cryptocurrency scams in that they tend to revolve around selling fake items. The most common form of this is when someone duplicates a popular item, lists it for sale on a website at a high price, but slightly lower than you would normally expect it to be worth so some users who are new to NFT’s can be fooled by it. The best way to check if a work of art is legitimate is to always check and artists social media channel to check if it currently for sale on a site, they will always list it and this way you can verify which site is should be on.
Credibility Problems
In recent months we’ve seen yet more cryptocurrency sites shut down for a variety of reasons but in addition to this we have seen customers who have lost all of their money starting class action lawsuits against celebrities who promote these websites. It will set a new precedent where celebrities will have to thoroughly check before they take on an opportunity even if the money is too hard to turn down. It has just been announced that Cristiano Ronaldo is being sued for $1bn in a class action lawsuit because he didn’t disclose he was being paid by an NFT company when promoting it. Ultimately, all of these things happening leads to the industry losing credibility.