A crypto scam is a fraudulent activity that takes advantage of investors’ trust in cryptocurrency to steal their money or personal information. Unfortunately, there are many scams in the world of cryptocurrencies, and fake whitepapers are just one example. Scammers may create crypto whitepapers scam to promote their own cryptocurrency or to trick investors into sending them money. But how to spot the crypto whitepaper scam ?
Here are some ways to spot a crypto whitepaper scam:
- Lack of technical details: A legitimate crypto whitepaper should include technical details about the project, such as the underlying technology, the consensus mechanism, and the cryptography used to secure the network. If a whitepaper lacks technical details or uses vague language, it could be a red flag.
- Plagiarism: Plagiarism is a common tactic used by crypto whitepaper scammers to make their projects appear more legitimate. You can use plagiarism detection tools like Copyscape or Turnitin to check if the whitepaper has been copied from other sources.
- Unrealistic promises: If a whitepaper promises unrealistic returns or claims to be the next Bitcoin, it’s likely a scam. Legitimate crypto projects typically avoid making such claims.
- Lack of a real team: A legitimate crypto project should have a real team of experts in blockchain technology, finance, and other relevant fields. If a whitepaper does not include information about the team or the team is not easily verifiable, it could be a scam.
- Lack of community engagement: A legitimate crypto project should have an active community of users, developers, and supporters who are engaged in the project. If a whitepaper does not include information about the community or the project lacks community engagement, it could be a scam.
- Lack of third-party verification: A legitimate crypto project should be audited or verified by third-party organizations or experts to ensure its legitimacy. If a whitepaper does not include information about third-party verification or the project lacks third-party verification, it could be a scam.
If you are considering investing in a cryptocurrency, it’s important to do your research and only invest in projects with a solid track record and reputable team. Don’t be swayed by promises of quick profits or high returns, as these are often signs of a scam.
There are infamous examples of companies who produced such whitepapers and fooled a lot of investors.
Bitcoiin2Gen (B2G) Crypto Whitepaper Scam
One example of a crypto whitepaper scam is the case of Bitcoiin2Gen (B2G), which was a cryptocurrency project that claimed to be the successor to Bitcoin. B2G was promoted by Steven Seagal, a famous actor and martial artist, who was hired as the project’s brand ambassador.
The B2G whitepaper promised a revolutionary new blockchain technology and a decentralized platform for secure transactions. However, upon closer inspection, the whitepaper was found to contain numerous technical errors and vague descriptions of the project’s goals and objectives.
In addition, the B2G team was found to have plagiarized large sections of their whitepaper from the whitepaper of another cryptocurrency project, Ethereum. This raised serious doubts about the legitimacy of the project and its claims.
Despite these warning signs, many investors were attracted to the project by the celebrity endorsement and the promise of high returns. However, the B2G project ultimately turned out to be a classic Ponzi scheme, with the founders disappearing with millions of dollars in investor funds.
Onecoin Crypto Whitepaper Scam
Another example of a crypto whitepaper scam is the case of OneCoin, which was a cryptocurrency project that claimed to have a blockchain-based digital currency with revolutionary technology.
The OneCoin whitepaper made several claims about the project, such as being the world’s second-largest cryptocurrency by market capitalization, having over 3 million users, and having a team of experts in blockchain technology and finance.
However, investigations by authorities in several countries revealed that OneCoin was a complete scam, and the whitepaper was a work of fiction designed to deceive investors.
The investigations found that OneCoin did not have a public blockchain, and the digital currency was not traded on any legitimate cryptocurrency exchanges. In addition, the project’s founder and key executives were found to have a history of fraud and financial crimes.
Despite these red flags, OneCoin was able to attract millions of dollars from investors through aggressive marketing and promises of high returns. The project eventually collapsed in 2018, leaving many investors with nothing.
In conclusion, the OneCoin project is another example of a crypto whitepaper scam, where a fraudulent project is promoted through a fake whitepaper, and investors are lured in by false promises of high returns and revolutionary technology.
How to identify fake cryptocurrency?
Here are some tips to help you identify a fake cryptocurrency:
- Lack of information: A legitimate cryptocurrency will have a whitepaper that outlines its purpose, technology, and team. If there is little to no information available about a cryptocurrency, it is likely a fake.
- Unrealistic promises: If a cryptocurrency promises to make you rich quick or guarantees high returns, it is likely a fake. No legitimate cryptocurrency can guarantee a return on investment.
- No clear use case: A legitimate cryptocurrency should have a clear use case or purpose. If a cryptocurrency has no clear use case or purpose, it is likely a fake.
- Lack of community or developer support: A legitimate cryptocurrency will have a community of users and developers who support the project. If there is little to no community or developer support, it is likely a fake.
- Fake or non-existent team: A legitimate cryptocurrency will have a team of experienced developers, advisors, and founders. If the team is fake or non-existent, it is likely a fake.
- No exchanges list the cryptocurrency: Legitimate cryptocurrencies are usually listed on reputable exchanges. If a cryptocurrency is not listed on any exchanges, it is likely a fake.
- Poor website design and functionality: A legitimate cryptocurrency will have a professional website with clear information and functionality. If the website is poorly designed or has limited functionality, it is likely a fake.