In 2016, a new way to trade cryptocurrency was introduced – BitConnect. By using BitConnect, users could “lend” their current Bitcoin holdings to BitConnect in exchange for new coins (Bitconnect Coin or BCC) that would earn interest during the life of the loan. Sounds good in theory, right? Of course, theory is all that existed – BitConnect was actually a ponzi scheme with no hard assets and no license to issue securities. Known as a high-yield investment program (HYIP), BitConnect paid initial investors huge profits from the cash brought in by new clients. The scam eventually ran out of money and BitConnect Coin crashed more than 90% in a single day. In an instant, $2.5 billion vanished and investors were left with worthless tokens.

Financial scams are all around us and even educated money managers are susceptible to them. And with the rise of unregulated markets like cryptocurrency and forex, scammers have  more playgrounds than ever to lurk around in. Money makes us emotional, which is why financial scammers will never go away. But that doesn’t mean you can’t protect yourself.


Today’s Most Common Financial Scams


Fraud is inevitable. Federal laws have made it more difficult to pull off financial scams, but you can’t outlaw dishonesty. Scammers persist, especially in unregulated markets like Binary options, forex, and cryptocurrencies. Here’s a few common scams to watch out for today.

Market Gurus – Amateur traders are everywhere on social media and many start a “service” to provide recommendations on stocks, currency pairs, etc. These gurus charge either an upfront or monthly fee for their “service” and proceed to recommend loser after loser (if they don’t disappear entirely). Like professional stock pickers, some gurus may beat the market in the short-term, but most only profit by collecting fees from unsuspecting “clients”.

Fake Forex / Binary Options Brokers – Currency markets trade all over the globe 24 hours a day. They’re also notoriously unregulated and rife with scammers looking for victims. Many of these scammers pose as reputable (but offshore) brokers offering great deals. After happily accepting customer deposits, these brokers refuse to honor withdrawals and do everything possible to keep the funds tied up. Some even purposely orchestrate losing trades for clients!

Cryptocurrency Scams – Fraud with crypto comes in all shapes and sizes. Fake wallets, fake brokers, and even fake coins have taken real money from investors. Cryptocurrency losses have almost no way of being recovered either. Use only a trusted broker to buy crypto.

Online Dating Scams – A modern take on the Nigerian Prince scam, these crooks message unsuspecting marks behind the profile of a potential partner. Always using attractive model-quality photos, these scammers convince their victims that they’re interested in meeting up, but lost their passport / bank card / cellphone and just need a little bit of cash to get it back. Once the eager victim sends the cash in hopes of meeting the attractive stranger, they disappear.

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