Tips on How to Avoid Cryptocurrency Scams


Cryptocurrency investment is the order of the day across the world. The investors are gaining a lot of profits from this business while in some cases there are losses. According to the director of Ecsponent Financial Services, Floris Slabbert, the business has ups and downs.

The digital currency lacks central regulatory authority hence immune to manipulations. The business uses blockchain technology for its transactions. The business technological development might be harmful to the investors. Some companies like Ethereum attract many people through declaring their Coin Offerings. They use this strategy to escape regulations by financial institutions such as banks. The UK entrepreneurs use the ICOs technology for their online tokens transaction.

The online tokens enable people to raise large sums of money within a short time span. For instance, in 3hrs, Bancor raised $152-million. Brave and Aragon raised $35-million and $25-million in 30 and 25 seconds respectively. Despite the opportunities in this industry, there are some red flags. Recently, BTC Global assured their investors a return of 14% weekly which never happened. The scam made over 27,000 investors to lose their money especially in Australia and South Africa.

Slabbert noted that most cryptocurrency ventures lack white paper in their operations. The few tech-startups with the white paper focus on getting rich faster. Investors should conduct an in-depth research about the cryptocurrency platforms. This will enable them to avoid losing their money through gambling.

Although some cryptocurrency businesses are good, the challenge is how to regulate them. The incomes raised by these platforms should be taxed to generate government revenue. The blockchain firms claim that financial institutions are criticizing the online technology. They argue that it creates a stiff competition in the banking industry. Slabbert critiqued the claim since the goal of investment companies is to attract more clients. These institutions should apply professionalism and ethical virtues when investing their clients’ money. Clients also should understand the digital world before investing large sums of money.


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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on [email protected] and we base our discussion on technology in Africa and the rest of the world.
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