This type of scam consists of inflating the price of a cryptocurrency through fraudulent or false information published in online communities, forums and social networks. Investors are encouraged to buy and hold the cryptocurrency because, according to the cybercriminals, they could make a lot of money in a short time. When the cryptocurrency reaches its peak price, the fraudsters cash in on the profits and the price begins to fall. Investors attempt to sell quickly to minimize losses. However, the asset price plummets at a dizzying speed, thus generating significant losses.
Under this scheme, new cryptocurrency projects appear on social networks or channels. These projects don’t really exist or are created only to make the most money as quickly as possible, and then they disappear.
New cryptocurrencies are usually launched in the market through an initial currency offering, also known as an ICO (Initial Coin Offering). This is a financing scheme by which a company can raise funds from high-liquidity cryptocurrencies, such as Bitcoin or Ethereum, through the massive sale of the new cryptocurrency that is about to be launched. Start-up companies sometimes launch ICOs, which raises doubts as to whether the offer is real or a scam.
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