Глоссарий

Exit Scam

Easy

An exit scam is a trick where projects disappear (or shut down) after accumulating investors’ money.

What Is An Exit Scam?

An exit scam refers to an event where a cryptocurrency project disappears with investors' money during or after the ICO period. In other words, whales try to pump the price alongside advertising and promotional activities, only to dump their coins later. It is quite difficult to spot such events until they happen, much like a black swan event, however, these occur more often than the latter one. 

What Is a Crypto Exit Strategy?

The exit scam strategy is simple: a project launches a cryptocurrency platform using a promising concept, raises funds from investors, runs for a brief period of time, and then disappears, leaving investors in a predicament.

The Rich History of Exist Scams in the Crypto Industry

In recent times, a number of projects moved towards the rug pull strategy (another form of exit scam). Even some of the most popular ones trusted by famous public figures have fallen under this category. One example is the recent TITAN project from Iron Finance, which gained popularity mainly due to the investment made by Mark Cuban.
Another popular example is the recent sale of Logan Paul's NFTs, where three holders of 3,000 NFT which were to be sold had a chance to win a Pokemon First Edition bundle valued at $40,000. The NFTs initially received a lot of attention which shot their worth above $20,000. However, at this point, most of these are left on OpenSea at a price of around $1,000.

What Is the BitConnect Exit Scam?

On January 16, 2018, Bitconnect announced that it was shutting down its currency exchange and loan operations after regulators from Texas and North Carolina issued a cease-and-forth order. After the closing of operations, the platform that was running a Ponzi scheme refunded users in the form of BCC (native token) that went from its all-time high of around $465 to below $1 within a week. 

How to Protect Yourself From Exit Scams?

Before you get excited and buy tokens promoted by your favorite YouTuber (usually at a price that has already gone up), be sure to check out the basics of the project. Often, a project is simply a cheap "copy" of an existing solution without solid foundations for its future growth. Do research when it comes to projects that offer high returns.  Also, be sure to use price tracking platforms like CoinMarketCap regularly to get the latest information and building materials when it comes to crypto tokens.

Статьи по теме

Easy
Crypto News
NFT Rug Pulls, Dodgy ICOs, Crypto Ponzis: U.S. Charges Six People over Four Suspicious Projects
"These cases serve as a crucial reminder that some con artists hide behind trendy buzzwords, but at the end of the day they are simply seeking to separate people from their money."
Автор: Connor Sephton
7 месяцев назад
Easy
Crypto News
The 10 Worst Crypto News Stories of 2021
From scam tokens collapsing to crypto fortunes going unclaimed, there have been some pretty gloomy stories this year. Here's a recap.
Автор: Connor Sephton
год назад
Easy
DeFi
Crypto Lost in Scams Hits $7.7B in 2021 — Up 81%
The surge has been fueled by a rise in so-called "rug pulls" — predominantly found in the world of decentralized finance.
Автор: Connor Sephton
год назад
Easy
Tech Deep Dives
The Logistics of Squid Game’s Hype
SQUID game rose — and then fell. Check out how often people watched the token ride its absurd price rollercoaster on CoinMarketCap before the scam news broke.
Автор: Daniel Phillips
год назад
Easy
Crypto News
Binance Investigates Squid Game-Themed Crypto Scam
After the SQUID rug pull last week, Binance plans to look into where the money went.
Автор: Andrey Sergeenkov
год назад
Easy
Crypto News
'I Lost Everything': How Squid Game Token Collapsed
Unusual tokenomics left investors who bought SQUID trapped — meaning they had no choice but to watch helplessly as the token's value surged to $2,800 and crashed to $0.0007.
Автор: Connor Sephton
год назад