Now that cryptocurrencies are going mainstream, many scams are emerging. While buying certain shitcoins can be a bad investment, there is a big difference between a bad investment and an outright scam. In this article, I will describe the best way to spot a cryptocurrency scam and how to report it to the authorities.
We will use an example of a current scam in operation by the name of Huh tokenand show you how to identify and report such a project.
How to identify a scam
The number one freebie for any scam is the fact that you can't find a contract address on their website or anywhere else. In our example, if you look at the official Huh Token website, you will notice that there is no contract address that can be independently verified on Etherscan or Bscscan.
If there is no contract address and the project asks you to send them money in exchange for tokens, you should know that it is a scam and you will never get any tokens back.
Also, the fact that a project does not have a contract address speaks to the scammers' lack of technical knowledge. After all, it's not surprising that scammers don't know how to launch a smart contract on Ethereum or Binance Smart Chain.
How to report a scam?
If you realized that you have been the victim of a scam, although there is no chance of getting your money back, if you are in the US, the best option is to send a report to three different agencies:
When reporting the scam on ftc.gov, you want to select the investment option, followed by the cryptocurrency.
Directions are extremely helpful on FTC.gov, and once you complete all the fields, you can submit your report.
Furthermore, not only are government agencies looking to enforce cryptocurrency scams, they have an asset. whistleblower program which can give you rewards for reporting and identifying scams.
While reporting the scam won't get your money back, you can at least rest easy knowing that you did everything you could to hold the scammers accountable for your actions.
If enough reports emerge about a particular scam, government agencies can launch a full-scale investigation and easily identify the scammers.
It's unfortunate that the crypto space is plagued with low IQ people looking to take advantage of unsuspecting investors. However, if we all do our part to identify and expose these scams, we will all benefit from a cleaner ecosystem.
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