Dark side of cryptocurrency: understand the pump risk and inverted schemes
Cryptocurrency has revolutionized the way we think of money, trade and financial operations. With thousands of digital currencies available, it is not surprising that many investors have risen on board to use high yields. However exciting the cryptocurrency, it also risks. One of the most significant and harmful fraud is the pump and the inverted scheme.
What is the pump and the inverted scheme?
The suction and inverted scheme is a type of investment fraud based on artificially inflated the price of cryptocurrency or other digital assets by disseminating false or misleading information about its value. The goal is to create a false emergency sensation, increase demand and increase price before starting your shares or currencies at an increased price.
How do bomb and inverted schemes work?
When pumping and inverting schemes usually include a group of people who work together to disseminate false information about cryptocurrency value. It may be:
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Pump risk and inverted schemes
While pumping and deleted schemes can cause significant losses for unsuspecting investors, they also pose another risk:
- Financial loss : Investing in cryptocurrency means characteristic risks, including market volatility and potential losses.
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- Lack of transparency : Pump schemes and inverts often include anonymous characters or small groups, making it difficult to follow those involved in this activity.
- Damage to reputation : Be stuck in a pump and a inverted scheme can ruin personal and professional reputation.
Red flags to consider
If you are going to invest in cryptocurrencies, be sure to be careful about the following red flags:
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Pump protection and inverted schemes
Although it is impossible to completely avoid investing in cryptocurrencies, there are action to be taken to protect:
- In research
: Before investing, do a thorough examination of any cryptocurrency.
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- Keep safe accounts : Use safe passwords, enable two factors and support the updated software.
Conclusion
Cryptocurrency is a complex and rapidly developing space, and suction and inverted schemes are at high risk for investors.