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How to identify scams and rug pulls in cryptocurrency

Degen Plays

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How to identify scams and rug pulls in cryptocurrency
  This is not by any means a comprehensive list of checks to avoid the challenges in the cryptocurrency space but it is in my honest opinion a very good start to doing some of your own due diligence and avoiding some potential losses. I think a great approach to risk management in trading  is to simply size in by maybe even if you are interested in an opportunity start with a small percentage of what you may have been thinking of contributing to a project and adding more at your discretion at a later date when the project is more proven to you personally.

1. Youtube checks : Beware a new channel 3 months or less of content by either platform or promoters of the platform.
B: Youtuber that is a serial scam promoter. 6 months to 1 year plus of failed projects promoted
by this creator ( mostly Shitcoins down 95% or more from all time high currently, Dapps & other platforms folded or disappeared in 30 days or less ).
C: flashy lifestyle vlogs traveling & or showing most likely rented cars or Homes.
D: NEVER be influenced by the quoted size of a youtubers contributions to any project. This
can be a costly trick to influence you to contribute more.
E: NEVER be influenced by a back office showing overnight success by promoters of any project
as this data can be manipulated & lead you to thinking the project is secured with more capital & interest than may be actually there.

Only Telegram chat support
Note: Encrypted anonymous chat programs where you can not decrypt content to use it
in a legal setting. Some people want privacy and I understand that but it can also be a
breeding ground infested with criminals using it like Plato's ring of Gyges.

3A. No website or
Website expires in less than 4 years
B. Website registered privately
C: Website not a .com
D: Website using similar or identical scripting to a recent failed opportunity
so called forks aka Free copies of another popular idea.

Fake CEO either actor or fake name: Anonymous owner IMO is better than fake
because privacy I can understand but fake trust building is a none starter.

5. No documented trades: actual historical trading data and preferably forward
positioning and trade ideas.
NOTES: When I say forward positioning I mean documented calls on 3rd party
platforms like Twitter or tradingview etc while the entry is still available not just
after the idea is in profit already.

6. Using hot buzzwords: Metaverse, NFT, Yeildfarming or mentioning of leveraged trading.
While these topics are very popular right now unfortunately they do not have a proven
track record of being profitable or are on the outer extreme spectrum of speculation.

7. Showing Financial licenses to build confidence: A recent popular trait of these financial
opportunities is to acquire licenses in various jurisdictions to build confidence in their
legitimacy. The license alone is not a bad indicator but especially when it is coupled with
behavior that is strictly prohibited by said license it is a red flag. An Example would be
an A.S.I.C.  license from Australia but soliciting potential investors in unsupported
jurisdictions like the USA and Canada ( both countries have strict protocols requiring
entities to be licensed locally to offer financial products to citizens here )

8. Compensation plan structure: While there is nothing wrong with a company offering
a compensation plan there are structures that are simply not sound mathematically.
An average person referring people to a structure will only be able to see people in
the first 3 levels statistically. This means opportunities with 7 - 9 levels of compensation
inherently will benefit mostly those closer to the top as almost everyone in the structure
will fall under them. Regardless of a smart contract or centralized database this presents
a backdoor for a small few to exit with a majority of the liquid crypto once the organization
is built to a level of maturity.

     Also paying front loaded compensation of 14% or more before any investing of the
funds has taken place is a bad sign as well. Most fund managers work on a 2% maintenance
fee ( regardless of performance ) and 20% of net profits structure. It is certainly a red flag when
there are compensations of 7x or more and they are based not on performance but paid to
promoters in advance of any profitable activity at all.


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