How to notice rugpull: key warning signals in the cryptocurrency market
Cryptocurrencies, such as Bitcoin and Ethereum, have been a burning topic of discussion between investors and enthusiasts for several years. Although they offer a unique opportunity to invest in a decentralized digital currency, many cryptocurrencies have registered significant price drops, which causes significant losses for investors. One of the most common forms of manipulating cryptocurrencies or “lasting trains” are the fraud that artificially exaggerate the market price of cryptocurrency through fraud and manipulation.
In this article, we will examine the key route warning signals and the way it shows to protect against possible losses.
What is rugpull?
Rugpull is a type of cyber crime in which a group of scammers artificially exaggerates the price of cryptocurrency, creating false commercial activities or distributing false information about the currency. This causes the influx of new investors who buy a currency, causing an increase in prices and then a fall when the market realizes that this is not true.
Key warning signals:
- Opaque commercial activity : Be careful if you notice a sudden increase in commercial activities for cryptocurrency without any reason or visible relationship with the project.
- False messages and rumors : scammers often spread false information about the currency using false messages, publications in social networks or phishing fraud. Be careful with each article or message that seems too good (or bad) to be true.
- This can be done by verifying a clear reserve indicating that the currency has never been recorded in the relevant organs.
- Lack of transparency : Be skeptical in relation to projects that have no transparency in relation to the team of programmers, technologies and finance.
5.
6.
How to protect yourself:
1.
2.
3.
4.
5.
Red flags in the cryptocurrency market:
1.
2.
- False or false liquidity suppliers
: Be careful in the field of commercial platforms that claim that they provide false liquidity, which can lead to a reduction in the value of the currency.
Application:
Cryptocurrencies can be a lucrative investment opportunity, but they also have a significant risk. When making the key warning signals for rugpull and taking measures to protect, it can minimize the risk and avoid the incidence of victims of this type of fraud.