The cryptocurrency market is a rabbit hole that presents people with unlimited opportunities. At the same time, there are also countless scammers and traps at every stage. A New York Times Journalist recently booked a tour to the deep well of the crypto world where new crypto coins are minted every day, and dead tokens are piled up in thousands. The author noted that several new altcoins are created by investors with no amount of IT expertise or knowledge.
He reported that it takes an average computer user to create millions of new crypto coins with an investment of $8 to $300 only. Most of these altcoins only have an edgy name to offer, like Cookie Coin or AstroCake. Otherwise, there is no real use case or aim of these projects to stay relevant for long in the market. These hype coins trend online for a while, and they are used by a few to make a profit and cash out quickly, leaving behind a long trail of victims.
JaiShil Tolia is a 31 years old dental surgery student hailing from England. He told NY Times how he ended up losing $30,000 with a scam altcoin called Bonfire. He put the money into the project because he liked the logo and the feel of the Telegram group. Within 3-4 days, the token went parabolic, and he made $1.4 million. However, he was not able to cash out his investment before the eventual market crash.
The journalist also told a tale of the scammers that are present in the DeFi sector or the Decentralized Finance platform. He wanted to buy some altcoins, and he chose PanCakeSwap as the medium. When he made the payment, the coins were not transferred to his account. He took his complaint to the help center and received an email. The email asked for his recovery phrase or seed password that must never be shared with anyone at any place.
Scammers are Targeting People Who have No Technical Background
The author of the NY Times was lucky enough to realize that he should not share his seed phrase with anyone at any time. The coins arrived in his wallet after some hours. Sometimes, the system works very slowly, and there are countless scammers on the trustless networks that can pose as a support provider without any danger of legal prosecution.
The author highlighted that there is no such thing as confirmation, verification, or authentication on the DeFi markets. If a person is planning to loot money, they have all the necessary options available to them for staying in the shadows and never providing any proof of service. According to the NY Times article, the investors should take their time with their investment and put a small amount of money into the market at the beginning.