Dissecting Cryptocurrency Scams — 22 Red Flags of Crypto Frauds

The hearts of men lust for gold and booty — we are not an inherently moral animal — skepticism is warranted when it comes to tantalizing cryptocurrency opportunities.

Listen to this as a podcast

Should the presence of one of these disqualify an opportunity?

It depends. As you’ll learn, not all the red flags fly at the same altitude. A multiplicity of red flags is a pretty good reason to back away slowly from an opportunity. There’s simply no reason to take a chance on something with a few tell-tale red flags because if it’s risk and volatility that you want you can just buy Bitcoin. If you want stability and a hedge against inflation just buy Gold-Backed Cryptocurrency which can be transformed into the shiny stuff in your hand whenever you want.

1. Charismatic cheerleaders

When I lived in Eastern Europe, in downtown Sofia, Bulgaria I used to regularly walk by the offices of OneCoin a “cryptocurrency” that turned out to be tremendous fraud to the tune of $15 billion.

2. Masses of irate customers

The good news about scams is that they usually aren’t terribly hard to sniff out. Scammers want to scam stupid, naive people — not really sharp, analytical people. Before you invest in a cryptocurrency check out what people are saying about it on TrustPilot, Reddit, and Youtube — are a lot of people saying that they got scammed by it?

  • Do the reviewers’ profiles look legitimate — Other reviews? History? Recent profile? Profile photos?
  • Legitimate reviews of businesses tend to be thorough and more detailed. Fake reviews are shorter and more generic. Do reviewers provide evidence for their claims?
  • You have to consider the size of the business to the number of angry customers they have. I’ll say something controversial, I think Paypal is a pretty decent company — I’ve had a Paypal account for over a decade and overall I’m quite pleased with the online banking and e-commerce services they provide. Paypal has a pretty awful rating on TrustPilot (13,000 1-star reviews) but they have almost 300 million customers!

3. Cultish suppression of dissent

  • Questioning, doubt, and dissent are discouraged or even punished.
  • The group is preoccupied with bringing in new members.
  • The group is preoccupied with making money.
  • The group has a polarized, us-versus-them mentality, which may cause conflict with the wider society.

4. Wu-wu moralizing

“We’re changing the world!”

5. MLM/Network Marketing structure

Don’t worry! It’s definitely NOT a “pyramid scheme”

6. 1%, 2%, or 5% daily interest

Daily interest, GUARANTEED!

7. Changing the value of coins


8. “Trading bot”

9. Mining opportunities

Cryptocurrency mining investments are often scams
Order: Cryptocurrency Scams: Keep Your Crypto Safe

10. No public blockchain

11. Only invest in open source

The future is open source

12. Crypto give-aways (often celebrity-endorsed)

“Send Bitcoin to THIS address and we will send you back double!”

You can trust THIS GUY

13. Direct Message Solicitation

No, thanks random dude from a Facebook group with an “opportunity of a lifetime”

14. “Account Manager” introduction (from a friend)

15. Urgency!

16. Recruitment pow-wow

You ONLY need to recruit THREE people below you!

17. Barrier to withdrawal

The check is in the mail, it will be there in just 10 “business days”

18. Spelling and grammar errors

19. “Helpful” mentor

20. Domain recency

21. Questionable management

Look into them…
  • Google them with the double-quotation marks (for accuracy — for example, “Jonathan Roseland”): look through the first few pages of search results — does it align with their experience described on the about us page? Are there media articles about them? Have they been involved in any scandals or lawsuits? Have they been called a scammer?
  • Look them up on social media (Facebook, Twitter, LinkedIn): What are they into? Do they seem like reasonable people?
  • Look for interviews: business people (especially in the crypto space) usually have a few podcast or Youtube talking-head-style interviews out there. Go find those interviews on Youtube or iTunes Podcasts and listen to what they have to say — often people will reveal interesting things in interviews.

22. Based in shady countries

Higher-risk crypto fraud countries


Trust is important in your interpersonal relationships, but in your crypto-dealings with strangers don’t trust people. Unfortunately, in business (especially the crypto business) a bit of paranoia and cynism will serve you better than optimism and hope. Public blockchain technology has been called “the trust machine,” it removes the need to place faith in (hopefully) well-intentioned and morally upstanding strangers. If a coin, company, or investment opportunity is not properly utilizing a public blockchain to prove what exactly they are doing, be vigilant for the red flags described here and invest significantly less than what you can afford to lose, if anything.

In this tweet thread, I’ll share tips and strategies for avoiding scams and fraud in your crypto dealings, do follow @marketplacegld on Twitter!
Originally published on MarketplaceGOLD.com. I’m an independent researcher passionate about financial antifragility and economic philosophy, not a licensed financial adviser. This is not financial advice. Please practice skepticism and critical thinking.



Adventuring philosopher, Pompous pontificator, Writer, K-Selected Biohacker, Tantric husband, Raconteur & Smart Drug Dealer 🇺🇸

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Jonathan Roseland

Adventuring philosopher, Pompous pontificator, Writer, K-Selected Biohacker, Tantric husband, Raconteur & Smart Drug Dealer 🇺🇸