Understanding Scams
A scam refers to fraudulent activities aimed at deceiving individuals, and cryptocurrency scams have witnessed a significant rise, becoming a favored method for fraudsters to exploit cryptocurrency investors.
Cryptocurrency scams manifest in various forms, such as blackmail, fake investment schemes, and deceptive business opportunities.
Ponzi schemes and fraudulent initial coin offerings (ICOs) have been particularly prevalent.
Texts, Emails, and the Menace of Ponzi Schemes
Scammers often send text messages or emails requesting users to pay using Bitcoin or other cryptocurrencies.
Ponzi schemes represent a specific type of investment scam that may involve BTC and other virtual currencies.
In such schemes, existing investors are paid using funds collected from new investors.
According to Chainalysis, a Ponzi scheme involving BTC and Ethereum generated an estimated $2 billion in 2019 alone.