Understanding Crypto Exit scam

freepik

Hello guys welcome back to this space.It feels good to have y'all back here. As usual I've prepared something delicious once again and I've got no doubt that you would enjoy it. Our previous discussion was on Dusting Attack and of course, it's done and dusted even as we proceed into what we've got for today.

Today, we would be looking at the topic above called Exit scam. Well I really do not know why my contents have been tailored towards that direction. All I think I can say if been asked is that, I'm trying as much as possible to empower you with knowledge so that you don't fall victim of these fraudulent activities in the market. Anyways let's get into it guys!

Introduction

I am not surprised that all manner of fraudulent activities happens in the crypto world, the reason is not far fetched, there is just a whole lot of ways of making it big here whether legitimately or illegitimately. While many are trying to follow the normal route to make it here, some others are taking the dubious route to make it.

And of course they do not care if they have to step on people to achieve their greedy financial goals...too bad. Now one of these dubious act is the Exit Scam which is common among project developers and promoters who are all out for their pockets and bellies. Anyways permit me not to let out the whole gist in this introductory phase. Let's get into the real deal...

What is an Exit Scam

An Exit scam is one of those common scam in the crypto world carried out by malicious project promoters...where they practically disappear with investors money during an initial coin offering (ICO) or shortly after it.

The process is quite a strategic one, in that the promoters or developers launch a new crypto project, market it, come up with an exorbitant and juicy plans thereby luring investors into their so called vision which apparently runs for a period of time before they dash off with the money realized so far.

The sad part of this whole thing is that they can't even be traced making the concept of anonymity in crypto look like a curse at this point. Meanwhile it's also a blessing. So if am to wrap it, I would say it's a double edged sword. These folks successfully carry out their rehearsed plot and run away.

This make a lot of folks out there lose confidence in crypto, they feel it all scam and you know how this will drag us back in the area of general adoption because a lot of people who have been victims of one scam or the other now have their reservations about the crypto space.

Like I mentioned, it's an already rehearsed and well planned out plot featuring multiple stages which takes their victims from moment of luring to trust and then betrayal...lols. Kinda funny but not anyways.

These guys start out by introducing a project and then finance it heavily, they spend heavily to put it out there by promoting it, and creating a buzz about the project, they create some fake websites with unproven partnership and the likes...all in a bid to lure investors.

When the investors join the hype in their numbers, the plans then change, these guys will then start looking for ways to get the money they have invested into it heavily first before looking to scoop more than enough from their unsuspecting victicms. Meanwhile, the whole plan is just to get the money by crook means.

How does the exit Scam work

freepik

Now you see them asking for donations, doing private sale or running ICO, and promising early birds support which are too-good-to-be-true with privileges, exorbitant returns. All of these then fuels interest and conviction on the path of investors to commit their money into the project.

They do not also stop there, they create this sense of urgency that further throws their victim into a state of impatience, playing on their psychology so much so that they do not realize when they loose their guard and join the band wagon, because of the profit they envisage and the fear of not missing out.

The final stage of this rehearsed plot catches these unsuspecting victims unaware because they have come to trust these promoters who are behind the scenes so much and have committed their resources.

freepik

This then becomes the perfect time for these fraudster, after realizing what they have put in initially to lure these folks and have also realized more than they expect, they run away with what have been realized so far. They shut down their website like it never existed, cut off all forms of communication and that it's... No one to hold responsible.

Typical Example in History

History still has in record the Exit scam carried out by Confido, a Blockchain startup as at then whose goal was to revolutionize traditional escrow service in 2017. They payed their game so we'll just as explained and raised a total sum of $375,000 using ICO.

Of course they made away with that money, shutting down their website, closing all communication links, proposed profit, offers and privileges all gone thereby leaving investors with practically noting but huge financial loss

Bottom Line

We just have to be careful when it comes to hype and buzz of new project, some are not out for good, they are out there to swindle people of their hard earned money. You have to be careful when you see offers that are too good to be true, it might just purge you. Ensure you digest this post properly.

I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.

Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!

---

^{Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.}

---

Regards
@lhorgic♥️

---

^Reference