Although cryptocurrencies are considered to be the solution to some long-lasting problems in the global economy, there’s one problem we have been unable to get rid of so far: fraud.

Why are there so many crypto scams?

It is given mainly by the increased demand for digital assets and by anonymity. Fraudsters often create their own platforms – and often promise extremely high returns – only to disappear with the invested capital. Some of these exchanges also offer above-average rates and if a naive crypto enthusiast deposits his funds there, it is almost impossible to get to them again.

A study published by Cointelegraph earlier this year revealed that, from January to August 2019 alone, losses due to cyber criminals exceeded USD4.3 billion. These included outright thefts, scams and funds being misappropriated.

Most of this was attributed to the company PlusToken, which Chinese officials allege is a pyramid scheme. It is believed that more than 100,000 users were affected by the scams and the amount of money held by the sham company exceeds USD2.9 billion. This is an insane amount that ranks this type of scams among the biggest ones of all time.

Before investing, investors should verify the media engagement level of the given company on renowned sites or the partnerships the company announces. Amateurish sites full of typographical errors or unrealistic amounts of profit expectations should also be warning signs.

The case of Blockchain Cuties Universe

Even legitimate companies can be accused of crypto scams. Blockchain Cuties Universe, a crypto game company, considered to be thriving and trusted by the community, says it has fallen victim to such an incident. Ads were registered that led to an almost identical version of the Blockchain Cuties Universe website, making users believe that the scammers belonged to the company.

The crypto community as a whole has been trying to stamp out this activity that damages the reputation of the entire sector. Although Blockchain Cuties Universe believes the crypto world has a chance to become a place free of scams, it also says vigilance from both firms and users is essential.