[Scam-Targeted Coins] ③ Principal Guarantee and 20% Profit? How to Avoid Scams

Last Year, Cryptocurrency Illegal Activity Losses Exceeded 1 Trillion Won
"Greedy for Big Profits May Lead to Fraud Damage"

As cryptocurrency scam damages persist, there are calls for investors to exercise extra caution when investing. To avoid falling victim to cryptocurrency scams, one should not be deceived by promises of principal guarantees or high returns, but rather assess the investment safety on their own before investing.

According to the National Police Agency on the 19th, the amount of damage caused by illegal activities related to cryptocurrency last year reached 1.0192 trillion won. Although this appears to be a significant decrease compared to the 3.1282 trillion won in damages in 2021, if the approximately 2 trillion won damage caused by the cryptocurrency exchange V Global, which conducted fraudulent activities through a multi-level marketing scheme in 2021, is excluded, the scale of damage is similar. The recent Gangnam kidnapping and murder case also involved suspects and victims who had previously invested together in cryptocurrency but had a falling out due to issues such as market manipulation.

Experts unanimously agree that to avoid cryptocurrency scams, the following points must be carefully checked.

Do they guarantee principal or high returns?

There are cases where someone promises to invest on your behalf and guarantees the principal or promises high returns of up to 20% annually. If the conditions sound too good to be true, it should be suspected as a scam. Above all, unlike securities, cryptocurrency-related investment advisory and discretionary investment services are not officially authorized by the government. This means there are no related regulations or sanctions, making it almost a lawless zone. If someone takes your funds and invests in cryptocurrency on your behalf, there is a high possibility of being scammed, and recovering damages from such scams is also difficult.

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Do they emphasize people and environment rather than blockchain?

Blockchain technology was created to solve security issues such as hacking that can occur during cryptocurrency transactions. In other words, security-related aspects should be prioritized for any cryptocurrency. However, some cryptocurrencies emphasize people, environment, gambling, or games rather than blockchain technology. This is also highly likely to be a scam. They present items that can mislead investors who lack understanding of blockchain. Just because something is written in a cryptocurrency whitepaper does not mean its business viability is recognized. It is difficult to trust cryptocurrency whitepapers, as there are even companies that produce whitepapers containing absurd business ideas on behalf of others.

Do they offer rewards for bringing acquaintances?

Some schemes offer a portion of the investment amount or cryptocurrency as a reward for bringing in acquaintances to invest. This is a typical multi-level marketing scam. There is a high possibility that they are engaging in a kind of Ponzi scheme through fraudulent activities, so caution is necessary. The ways to make money with cryptocurrency are simple: investing in cryptocurrencies listed on exchanges to gain capital gains or mining directly. If you try to make money through multi-level marketing schemes, you risk not only being scammed but also being implicated as a scam perpetrator yourself.

Ultimately, experts commonly point out that individuals must assess the risks themselves before investing in cryptocurrency. Professor Hong Ki-hoon of the Department of Business Administration at Hongik University said, "The reason people invest in cryptocurrencies issued by domestic companies is volatility," adding, "If you get greedy trying to make a big profit at once, you may fall victim to scams." Professor Hong also emphasized, "You should not trust a cryptocurrency just because it is listed on an exchange," and added, "You must always be cautious and vigilant like a meerkat."

This content was produced with the assistance of AI translation services.