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Author: Admin | 2025-04-27
Five years after the token’s release. Limit on sell orders The code may prohibit some investors from selling, while others may be able to scam. You can test this by buying a small amount of the new coin and trying to sell it immediately. If you cannot sell tokens, it’s a red flag that the project is fraudulent.Exploding price fluctuation with a limited number of tokenholders Be careful about abrupt price movements in new coins, particularly those without a liquidity lock. Fraudulent cryptocurrencies tend to see significant price surges before the decline. Use a block explorer to determine the total number of tokenholders. If a limited number of users hold a cryptocurrency, the token is more susceptible to price manipulation.Suspiciously high yield If it sounds too good to be true, it usually is. A new currency promising unusually high yields might be a Ponzi scheme if it isn’t a rug pull. Although not always a sign of fraud, tokens with triple-digit annual percentage yields (APYs) typically come with high risk.No external audit Check whether the cryptocurrency you’re considering investing in has undergone a rigorous code audit by a trustworthy third party. Potential investors shouldn’t just believe a development team when it says an audit has been conducted. Rather, they should examine who the auditor is and how reliable they are. Examples of crypto rug pull Rug pulls are carefully planned by bad actors who use social media influencers and create hype to trick as many people as possible into investing.Here are a couple of well-known examples to help you understand how these scams work:OneCoinRuja Ignatova, known as the crypto queen, co-founded OneCoin in 2014, positioning it as a revolutionary cryptocurrency. Later, it turned out to be a bogus Ponzi scheme that stole billions from investors all around the world. In 2017, the crypto queen disappeared, keeping law enforcement at bay. Her whereabouts are still a mystery. OneCoin is among the biggest crypto frauds in history. Squid GameIn 2021, the Squid Game project was launched, inspired by the popular South Korean Netflix series Squid Game. The promoters presented Squid Coin, the project’s native token, to investors as exclusive access to the play-and-earn (P2E) game. The hype built up, and the token’s value skyrocketed. However, the project’s developers suddenly disappeared after cashing out their tokens and dumping investors. The token’s price crashed to almost nothing.AnubisDAOAnubisDAO, a decentralized autonomous organization (DAO), promised substantial
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