Last year, American consumers reported losing more than $5.8 billion to fraud compared to $3.4 billion in 2020. The rise of digital currencies make fraud more likely as people are looking into ways to make fast money. Most recently, the Ethereum Max scam made it’s way into the limelight thanks to influencers like Kim Kardashian. It’s not so easy to identify crypto scams these days, so what can you do? Keep reading to learn more.
What Is the Ethereum Max Scam?
Ethereum Max (Emax) is an ERC-20 token on the Ethereum blockchain. It’s not a competitor, fork, or upgrade of Ethereum. ERC-20 tokens can be created by those with little to no technical skills. The token takes advantage of functions on the Ethereum blockchain. Despite its name, Emax is not affiliated with the people behind Ethereum. This is a common problem in crypto because names are not policed or copyrighted by the developers.
For example, you can buy Ethereum name service based on the Ethereum blockchain. But, this token is not made by the same developers as Ethereum. ERC-20 tokens are generally just for fun and don’t have a function while others are used to operate secondary software systems in hopes of increasing the token’s value. It’s not well-known how this token works and it promises rewards for investors with no real merit behind it. So, who started Ethereum Max? That is also unknown as there is no information about the team behind the “project.” Projects without known developers and backers are generally considered crypto red flags.
How to Protect Yourself From Crypto Scams
You can protect yourself from crypto scams like the Ethereum Max scam by staying up to date on news in the digital currency world. An entity that makes unsolicited contact with you via social media, email, or text is not likely to be trusted. Don’t give these entities your personal information. If something seems too good to be true, it probably is. Investment schemes should always be heavily researched before you jump into anything. If you have a cryptocurrency account, turn on two-factor authentication. Always use apps from the official app store.
Types of Crypto Scams
Crypto scams are on the rise because there are few regulations governing the market compared to the traditional stock market. If you fall for a cryptocurrency scam, you might be out of pocket for a lot of money unless you are signed up with an exchange that promises to recompensate customers.
These are what a few of the crypto scams out there could look like:
- Ponzi schemes
- Pump and dump
- Fake celebrity endorsements
- Fake exchanges
- Imposter apps
- Phishing scams
The best way to avoid these schemes is by researching developers and the team behind a project. If you have to pay upfront for anything, it’s likely just a get-rich-quick scam.
Invest in Crypto Responsibly
There are a lot of crypto exchanges out there that protect customers from fraud and schemes. To avoid any crypto scams, it’s important to stay up to date on reputable news. If something seems too good to be true, take a second to do some research before falling for anything. Using this guide can help you understand how to avoid fraud like the Ethereum Max scam. For more informative investment articles like this, check out the other posts on our site.