Crypto is Risky and Full of Hungry Thieves
First of all any investment comes with risk, the difference is just how big the risk are. Investing in crypto can be really profitable, and with that profit comes a big risk, and those risk really is like throwing out your money just in a blink of an eye.
The crypto and blockchain nature which is open source, make it easy for anyone with good programming skill to make any new project by copy pasting any exist project with a bit of tweak to make money out of thin air. Also the anonymity of the blockchain also makes it harder to track down and freeze the money gotten from scams. Its really risky and full of hungry thieves waiting for you to take the bait.
Its Exit Scam !!!
The most common risk in crypto project exit scam a term in which a developer of a crypto project vanished with the money from the investor investing the project either in the development stage or after the project release.
How the scam are done follow greatly on where is the crypto hype went into. Like the previous 2017 bull run, ICO or Initial Coin Offerings are the easy way for coin developer to scam people. They will promote and try to sell the coin's project with the ICO or presale, then they will left after the presale with the money from the investor. Leaving the investor with nothings but a bunch of useless token and numbers on its wallet.
The Latest is Exit Scam Called Rugpull
with the development of Defi, things has shifted a lot. People are eager to try this new way to use crypto and blockchain. making it easier for people to trade and borrow money in blockchain technology.
But as mention before, the thieves are going into the same direction as the hype goes. When Sushiswap is a big hit in the Defi Section, other will just copy paste its project code, and add a little spices and some crazy mining reward to lure the victims.
They way they do it now with the defi things is called rugpull, in which the scam developer deliver the product into the defi exchange. And then take out all the established coin from the Liquidity Pool, and left the LP provider with a bags full of shitcoin. The latest event is the TurtleDex which you can read on my previous post.
Always DYOR
Finally the last thing you can do to avoid being scam is to always DOYR do your own research about the crypto project you want to invest in.
always check the team behind the project, the roadmap of the project, its use case, and always invest in the money you afford to lose. And cross finger those scammer wont get into your way.