How to Identify Crypto Scam Projects

As Cryptocurrencies become more popular than ever before, new users keep trooping into the space each day. As such, a lot of so-called projects have positioned themselves to take advantage of crypto noobs. 

Many who are new to the crypto space have a wrong mindset of what Cryptocurrencies are and they just want to get rich quickly. Various “crypto projects” have made enticing promises, only to end up disappearing.

While scam projects could be built on any network, the Binance Smart Chain ecosystem has witnessed an avalanche of crypto scams recently. It is vital that all in the crypto space remain cautious before investing in infant projects.

Binance Smart Chain Projects That Recently Pulled the Rug

A few days ago, Turtledex, a project that claimed to devise an innovation that helps store and preserve files without needing to keep them on a computer disappeared with crypto tokens worth $2.5 million. The founders’ rug pulled just 24 hours after it’s launch, removing liquidity and sending the converted tokens to Binance exchange.

More surprisingly, another project called DeFi100 rug pulled on May 22. When investors checked the site, they were met with a pathetic cum funny message. The message reads: “We scammed you guys, and you can’t do shit about it”. Such audacity!

Most surprisingly, Fairmoon, another project built on the BSC network rug pulled on the 19th of May. Ironically, the project was founded with the aim of fighting rug pulls and the community members attached the slogan “War on Rugs” to the project. The ex leader of the movement was allegedly guilty of selling off all his tokens and dumping the project on investors.

You may be wondering how to Identify and avoid scam projects in the crypto space. There are different indicators to watch out for to avoid being scammed.

How to Identify Scam Crypto Projects

While scam crypto projects don’t come with a specific label, it is possible for investors to Identify Scam projects beforehand. 

  • Research the Project via BscScan

BscScan is a vital platform that provides a lot of information on Binance Smart Chain Projects. The project’s contract address can be searched on BscScan. Upon checking the details of the project, if the contract is not verified, it is a red flag.

Also, if the address that deployed the contract owns most of the supply of the token, that simply means the owner of the project can decide to dump the token on investors and move on like it happened with the FAIRMOON token.

Another thing to look out for on the platform is the social media accounts of the project. If the social media accounts are disabled, that’s definitely a negative sign.

  • The Project’s Roadmap and Purpose

The purpose of the project and it’s Roadmap can also help you determine if the project is worth investing in. Since it is easy to deploy crypto projects on the smart chain network, many projects are launched without a solid agenda. This can be a bad sign as it indicates that the founders lack innovation and direction.

  • Smart Contract Audits

A solid crypto project always passes through smart contract audits. This is to make sure that the project is secure. Most scam projects don’t bother to invest their time and resources in audits since they intend to leave shortly. However, it is also possible for an audited project to pull the rug.

Conclusion

While scammers get smarter each day, crypto users must get smarter too. Users should learn to limit avoidable losses. No doubt, more scam projects will be launched. It is the duty of crypto users to cautiously avoid scam projects and exploiters.

 

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