Beware of opaque transactions with cryptocurrencies such as Bitcoin, Ethereum & Co.! Six signs by which you can recognize dubious cryptocurrency providers.
The essentials in brief:
- There is a lot of questionable advertising circulating on the Internet and in social networks for investments in cryptocurrencies such as Bitcoin, Ethereum & Co.
- Often a very high return is promised. Mostly it remains completely unclear what one should earn money with and what the business model is.
- In many cases, these are probably forbidden pyramid schemes, which are intended to attract additional paying participants. Fraud cannot be ruled out either.
The soaring of Bitcoin stocks has sparked a real hype about cryptocurrencies. In addition to reputable providers, there are also black sheep at the start who take advantage of the gold digger mood around Bitcoin. Dubious companies and private individuals present themselves in Facebook groups, on Instagram and in messenger services or contact consumers by email without being asked. They promise financial freedom, high returns or permanent passive income through crypto mining, trading or investments in new, supposedly future-oriented cryptocurrencies.
BUSINESS MODELS UNCLEAR, CRYPTOCURRENCY PROVIDERS OFTEN ABROAD
The offers are often completely non-transparent and the business models incomprehensible. More detailed information is often only available after contacting or registering on the advertising websites. Often, however, the provider imprint is missing entirely on the websites or the providers are based abroad – also on Caribbean island states. If you have to try to enforce your rights over this distance, in case of doubt you have high costs and bad cards.
IMPORTANT! Consumers are increasingly complaining about providers who lure them into dubious investments with deals in Bitcoins and other cryptocurrencies. The market watchdog experts are currently investigating complaints about almost 20 different providers and six different currencies.
NEW MOTTO, OLD SCAM: PYRAMID SCHEMES
There seem to be forbidden pyramid schemes behind many offers. As a participant, for example, you should pay an entry fee or, as an “agent”, recruit new prospects. You should receive commissions for this. Pyramid schemes like to promise investors high returns. But you need a constantly growing number of participants, because the payments to the members are financed by the contributions of the new participants. These constructs inevitably break down.
As with other investment offers, fraud can not be ruled out either: if the provider has collected a large amount of money from bona fide investors, it disappears, never to be seen again.
SIX SIGNS BY WHICH YOU CAN RECOGNIZE DUBIOUS CRYPTOCURRENCY PROVIDERS
- Exaggerated Promises
Ignore offers with conspicuously high returns or permanent passive income.
- Headquarters abroad
Make sure that the provider is not based abroad. In case of doubt, this can make it even more difficult for you to enforce your rights.
- Referring friends
Ignore requests to refer new prospects yourself, even if you are promised high commissions or returns.
- No imprint
Check whether the provider’s website has an imprint.
- Lack of transparency
You should distrust non-transparent and incomprehensible business models about which you should only receive more information after contacting or registering.
- Unsolicited contact
If you are contacted without having shown interest in cryptocurrencies beforehand, you should be suspicious.
INVESTING IN CRYPTOCURRENCIES IS HIGH RISK
But you should be extremely careful even with presumably reputable offers. Cryptocurrencies are subject to high price fluctuations. A total loss cannot be ruled out. Bitcoin, Ethereum & Co. are not legal tender, but substitute currencies. Where they will be accepted as a means of payment and whether they will be able to hold their own in the market can hardly be reliably predicted.