Pump and Dump Scheme

The same scam of  pump and dump scheme is used in some telegram groups.

In fact, there are telegram groups that are dedicated only to the pump and dump of some low liquidity altcoins and on exchanges that are not of the highest order. In these groups, the pump organizer will indicate a coin with a surprise message about the group. At the same time, this coin on the indicated exchange will have a sudden rise in price, even in the order of 50 or 100 percent. This climb will be very short, we are talking about a time ranging from 2 to 5 minutes, and then the price will drop again due to lack of buyers. In fact, the system is fraudulent because the organizer of the group in the period preceding the message bought up coins at a very low price. When he posts the message on the group, he puts purchase prices for a few coins at very high prices, making other users of the group follow him in their purchases as well. Immediately after, the same organizer of the group begins to sell the coins bought at low prices. The pump runs out when the organizer has run out of coins to sell and the price immediately collapses due to lack of buyers. Most of those who have been a little slower than the other users of the group, but who have bought at an exaggerated price, remain screwed by the climb and with the coins in their wallet.

 

Trading Bot scam.

A trading bot scam is simply a website that sells a trading system or bot, which most likely does not exist, at a not particularly high price. This revolutionary and innovative software is sold on these sites, which through an incredible and unsurpassed artificial intelligence, allows the user to trade on various assets and to have unthinkable earnings. All while spending ridiculous amounts like 200 or 300 euros. These trading bots are promoted with fake sites and portals, where there are fake testimonials, with fake investors and even with fake testimonials taken from the world of VIPs. It’s all fake, only the money you will loose is real.

These sites are complete scams, because given the small amount requested per user, upon reaching a figure such as 500 thousand 1 million euros, the site will be closed and the money will disappear on accounts abroad or in offshore banks. The small amount at stake means that none of the scammers spend money and time on complaints and lawyers given the costs of justice.

These trading bots cannot exist, both because the figures requested from users are too low, and because each financial asset has its own peculiarities and therefore a single bot would never be calibrated to work at its best. In this case the ideal victim is the one who knows nothing about finance and trading, wants to earn quickly without effort and without studying. A minimum knowledge of the environment would be enough to understand that these systems are only used to enrich those who create and advertise them.

Any information on those sites is created for the sole purpose of enticing people and making them fall into a trap, sometimes prompting them to spend more money to make these non-existent programs work even better.

 

Fake Ledgers

Another scam that has been happening lately concerns hardware wallets bought on second-hand markets such as ebay or passed off as new on sites of unidentified origin. The user buys the wallet on the site and if he sees it delivered to his home. Inside the box, he already finds a seed phrase, with clear instructions that this phrase is the one to use with this wallet. A user with a minimum of experience and who read our blog knows that this is a security flaw. In this case, the experienced user would format the wallet and create another new one of which only he has a password and seed.

The inexperienced user, on the other hand, uses the wallet directly with the phrase indicated by the seller. In this case, the scam seller is aware of the sentence and monitors the wallet. When the wallet is filled with some bitcoins or other coins, the seller empties it by stealing the funds from the inexperienced user.

Be careful when buying hardware wallets, if possible only buy them new and always from official sites. In the case of a used one, always create a new phrase and a new wallet.

Learn more about scam in Part 4 here.