With popularity comes scams – motto of today’s cyber-attacks! Cryptocurrency has gained immense interest among people, especially those who belong in the middleclass. This is eye candy for cybercriminals. Recently, a business executive in Hyderabad was fooled into registering a crypto account with a phoney crypto company. They managed to persuade him to contribute more than 60 lakh rupees by displaying an inflated rise in his investments. It was too late when he realised he had been scammed. He eventually went to the cops and filed a report.


Charles Ponzi was a con artist from Italy. The ruse is straightforward. Investors are promised huge gains, but ultimately the money is stolen. This fundamental deception refuses to die. With the likes of Bernie Madoff piling up billions in damages for investors just a few years ago and smaller fraudsters being hauled into jail every year for small-scale Ponzi schemes. Put it down as a Ponzi if you encounter a crypto “enterprise” promising profits of 10% a year or more, or even just 10% a month. To keep spinning, a Ponzi scheme pays old investors the cash invested by new investors, and it requires an ever-growing portfolio of investments. The revenues don’t come from a dirty company; instead, they come directly from the Bitcoin wallets of the most recent victims of fraud. The scam falls when it runs out of new money, albeit it usually collapses when the culprit behind the scam begins to sense the net crushing in on them and decides to flee. Another bad indicator is if the plan promotes existing investors to attract new investors, but the basis is straightforward. If the programme promises much greater yields or earnings than you might obtain from a known brand on Broad Street, it’s a fraud, and it’ll most probably be a simple Ponzi scheme.

It has been a plague in the crypto world, particularly among minor exchanges, but it’s also rampant in initial coin offerings (ICOs). The most basic method is to advertise a plan, raise funds through an ICO or a trade, then collect the profits and go. This has reached a new degree of complexity thanks to exchanges. They accept coins and let you trade them. They resell the coins somewhere else and trick buyers into thinking they’re exchanging coins when they’re really just fooling about with the exchange’s accounting system. The balances don’t really represent coins that have vanished from the exchange’s Bitcoin wallets. They shutter up business when deposit demands for withdrawals reach too close to the limitations of their depleted Bitcoin wallets.

A good solution store your bitcoins would be to systematically secure your Bitcoin wallet. Substantial crypto holdings should not be kept on exchanges. Withdraw your funds out on a routine basis and store them in an off-exchange wallet on blockchain. Any transaction that doesn’t pay off quickly or can’t be reached should be avoided. Basically, you should never put your confidence in any exchange since they are similar as banks. Most banks fail, regardless of how well-respected they are, how well-regulated they are, how much revenue they have, how large their headquarters are, or how wealthy their executives are.