What Is an Exit Scam?
An exit scam refers to an event in which a cryptocurrency project vanishes with investors’ funds during or after the initial coin offering (ICO) phase.
This deceptive practice involves whales artificially inflating the token price through marketing and promotions, only to sell off their holdings later, leaving investors at a loss.
Exit scams are often difficult to anticipate, similar to black swan events, but they occur more frequently.
What Is a Crypto Exit Strategy?
A crypto exit scam follows a simple pattern: a project launches a cryptocurrency platform based on an appealing concept, raises capital from investors, operates for a short period, and then disappears, leaving investors in a precarious situation.
The Rich History of Exit Scams in the Crypto Industry
Recently, numerous projects have adopted the rug pull strategy, another exit scam.
Even projects endorsed by notable public figures have fallen into this category.
How to Protect Yourself From Exit Scams?
Before rushing to invest in tokens promoted by your favorite YouTuber (often at inflated prices), conducting thorough research on the project is crucial.
Some projects may be cheap imitations, lacking a solid foundation for future growth. Exercise caution with projects promising high returns.
Regularly consult price tracking platforms like CoinMarketCap to stay updated and gather reliable information about crypto tokens.