One danger of having a large social media following is that your account
gets poached. It’s happened a dozen times to me, on every platform. Fake
Jeffrey Tuckers have routinely popped up on Twitter and Facebook. I have to
waste time getting the accounts disabled.
A particularly bad platform for fakes is Instagram. I’ve racked up quite
a number of followers there, even though I rarely use it. That makes me a
target. Someone can easily set up an account with my image and name, just using
a slight variation, and then they can contact the people who follow me. They
can block my own account so that I never know they exist.
This happened to me at some point last fall. I knew nothing about it. I
rarely check in to that account, so when I did I found dozens of notes to me
saying that they would like to follow up on my Bitcoin investment idea.
Ripoff!
Huh? I would never private message anyone with an investment idea. That’s
completely nuts, and probably comes close to illegality. I would never do it.
Utterly crazy. Why did people believe that I would? A certain degree of
gullibility I suppose.
In any case, after months of exasperation with this nonsense I finally
did what I should have done in the first place. I reported the fake account
with proof that I am who I am and not the guy who is pretending to be me. After
a week or so, they finally got rid of the fake. Good.
In the meantime, I do wonder how many people got scammed in my name. I do
not know. What I find incredible is that anyone would go for it. And yet smart
people do. They find someone they trust — not knowing it is a fake — and go for
the promise of high earnings.
I do not know the nature of the scam, but I’m guessing that it followed
the usual path. Send Bitcoins right away. They will be invested with people who
need money. These investments will pay big returns. Then the company will send
back my crypto with lots of new earnings.
I’m rich!
It never works. What happens is that you send your crypto to someone and
they disappear. There is absolutely no legal way to get the money back. As I’ve
explained repeatedly, the glory and the danger of crypto is the speed of
settlement. When you move coins from your wallet to someone else’s wallet, the
property is transferred. Period. You cannot get it back. In this way, crypto is
very different from a trust-based system like banks and credit cards. The
property moves without an intermediary (unless you are using an exchange).
Rules for Scam Avoidance
It seems more than obvious. I shouldn’t have to say it. But given the
number of people who bought into this, I will say it. Never ever engage with
anyone on social media concerning some crypto investment idea. It is a
guaranteed scam. Even if you think you know the person. Do not answer and do
not bite. Do not denounce the person. Just apply an immediate block or simply
ignore it. Period. No exceptions.
That’s the first rule of avoiding scams.
There are others. I went to my old friend, a trusted source of all such
matters, a man who runs TheBitcoinConsultancy, and a brilliant observer of the
industry, and he offered a valuable look at some other tips for avoiding
rackets. He puts this in the form of 5 solid questions to ask before getting
involved.
1: Does this project have a legitimate profit model? There are plenty of
ways to make money in crypto: mining, lending, holding, and trading. There are
many illegitimate ways and they are rather obvious if you look carefully at
them. Any legitimate Centralized Finance (CeFi) company will disclose its
business model. A Decentralized Finance company will too but they are not as
easy to check, and this is by design. But you should be able to verify its
legitimacy with a white paper and other sources online that verify
opportunities.
2: Is this project feasible and sustainable? My friend gives the example
of many tokens out there that are designed for particular niches, such as
buying prescriptions online or gaming. If the project is too niche, it has no
possibility of scaling. It is very likely a pump and dump, just something to
arouse naive interest before the coin disappears. It seems amazing to me that
people are still falling for such nonsense, but that’s where we are.
3: Does this project have independent verification or third-party
certification? There are very few legal ways in which crypto companies are
allowed to trade your money. They must be registered if they do so, and this is
an arduous process. Very few companies end up jumping through all the
regulatory hoops. You can verify this with FINRA, SIPC, or the SEC. These
companies are simply not allowed to advertise their services, via instant
messaging or pushes on social media. No hedge fund is allowed to do that. If
someone is, it is likely a scam. In addition, the crypto industry itself has
its own verifications at Rugdoc.io
4: Can you independently verify this token or platform? Always check new
tokens with coinmarketcap or some other services that watch crypto prices. If
the token is not listed or cannot be verified, run away. There are no
exceptions to this rule.
5: Check out the management structure. Any legitimate company will
include the names of its officers and they should be judged according to their
professional reputations. Many people in this industry have ruined their
reputations by getting involved, however accidentally, in companies that are
not legitimate. Their names are now mud. That sounds cruel but that’s the way
it is .
My friend has looked at more than 2,000 cases of crypto scams and finds
that 95% have these common problems. They offer “unrealistic returns,
high-pressure tactics, sales pitches via messaging platforms, no mention of
fees, and lack of reputation.” If you can avoid those problems, you will avoid
most rackets in this industry.
It sounds boring, but the best and safest way to earn money in this world
is not by leaping on the latest fad, much less buying some non-fungible token
in the art world. The best path is to buy and hold. Nothing more to it than
that. There are fancy things you can do later but avoiding rackets and scams is
priority number one.
Jeffrey Tucker
For Altucher Confidential: https://altucherconfidential.com/
Profits from games of knowledge: https://www.predictmag.com/
