Unfortunately, the world of cryptocurrency has seen a bunch of people running scammy ‘investments’ preying on people’s lack of knowledge. Over the past couple of years, shady organizations such as Onecoin, MMM Global and others have brought a slew of shady characters operating get-rich-quick schemes and Multi-Level Marketing scams. It’s good to know how to spot these types of sketchy operations and refrain from participating.
Beware of So-Called Online Investments
Bitcoin.com has done extensive reporting on the likes of the so-called digital currency Onecoin. We’ve also covered a few other MLM operations that use virtual currencies and have uncovered many red flags associated with these businesses and their employees. Besides Onecoin, there is a vast amount of other scams that people should be aware of so they can better protect themselves and their legitimate investments.
Social media has a broad array of groups that pay particular attention to the cryptocurrency landscape. However, when following these groups on Facebook, Google Plus and many others, there is a ton of scammers preying on visitors. They offer unheard-of returns on investments for those wanting to join their ‘club’ as well as promises that will never materialize. Here are some promises from people offering ‘investment opportunities’ within crypto-groups on social media:
31 days online, 30 days paying. 0.3% hourly forever, 7.5% daily forever, 60% weekly forever. 0.001 BTC minimum, and automatic withdrawals.
OMG! Just signed up.. $4 bonus… with potential income of $100 a week or less.. Completing simple tasks, no investment, totally free… just sign up.
New Doubler Investment Site!!! 0 running days, 200% hourly for 50 hours, 240% after one day, 355% after two days, 470% after three days, 585% after four days, 600% after five days, Min deposit:$1, we accept bitcoin.
‘Scam Artists: the Evil Cousins of Genuine Entrepreneurs’
Many of these types of investment scams ask for people to send a minimum of bitcoin so they can expect a bigger payout in the future. Furthermore, a lot of these shady organizations run under a Multi-Level-Marketing (MLM) business model. MLMs consist of people who are selling in a pyramid or referral type of marketing system. The business model requires recruiting more people to fund the entire network and has always been a controversial business plan. Companies can often be seen operating in this manner using bitcoin within their operations and accrue revenue from direct sales and downline distribution. And yes, there are legal MLM structures in many markets that run legitimate business operations and should not be considered Ponzi schemes.
However, a large portion of MLMs associated with Bitcoin (if not all) are shady operations, so buyers and potential registrants should beware. Scams in relation to Bitcoin mean the community must continuously be on top of its game to expose such operations. Austrian economist Jeffrey Tucker believes scams are a form of flattery and a bullish sign for the digital currency. Tucker explains this rationale in 2015 stating:
Let’s ask a deeper question: why are scam artists so attracted to Bitcoin? The answer is actually flattering. Scam artists are the evil cousins of genuine entrepreneurs. They are alert to new opportunities. They are attracted to ventures that are popular among the smart set. They are profoundly aware of what people imagine to be the next big thing. Their interest in Bitcoin, then, is actually a bullish sign. I would be more worried about this market if scam artists were not interested in it.
If it’s Too Good to Be True, It Probably Is
A lot of online resources and consumer reports may help distinguish whether or not an ‘investment operation’ is a scam. It’s safe to assume that most of the MLMs and significantly ‘high investment’ return opportunities associated with Bitcoin are not legitimate operations. Most of these scam artists and fake investments are pretty easy to spot, and people should be very cautious when approached by individuals soliciting money on the internet. If the investment sounds too good to be true with wild promises of daily payouts, or you need to recruit hundreds of people to earn income, then it’s probably not in your best interest.
What do you think about MLMs, doubler investments, and scam artists using Bitcoin in the backdrop? Let us know in the comments below.
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Beware of Crypto-MLMs and High Return Investments on Social Media