Fraud Protection
18 questions
Where do the payouts come from?
From the deposits of later-joining participants, not from earnings.
Why is a very steady return suspicious?
Because every market-based source of return comes with fluctuation.
Which structural check is most effective?
Whether management and custody are separated, and who independently holds the assets.
Why do such schemes only work with small assets?
Because with shallow market depth, even small volumes produce large price moves.
What role does the rising price play?
It acts as apparent confirmation of the narrative and reinforces confirmation bias.
What communication trait is a red flag?
Manufactured urgency. Real opportunities don't require rushing.
What happens in a rug pull?
The creators withdraw the deposited liquidity, making the token practically unsellable.
Which contract traits are checkable?
Functions for minting new tokens, changing trading rules, sale restrictions, and admin rights.
What doesn't an audit report cover?
It evaluates technical bugs, not the participants' intent.
Why is selling a strategy a warning sign?
Because a working strategy scales with capital, while selling it only scales with customer count.
Why do visible success stories tell you little?
Because among many providers, a few will show multi-year positive results by chance alone, which is what makes them visible.
What structural problem do signal groups have?
Shared execution worsens the price for everyone acting after the first, at the expense of later participants.
Which entity determines your protection?
The contracting one. A sister company's authorization doesn't protect you.
What are regulators' warning lists?
Free, regularly updated lists of firms operating without authorization.
What trait was central in documented collapses?
The lack of separation of client funds and a non-independent custodian.
What's the first step?
Stop transferring anything and contact the bank right away, since recovery deadlines are running.
Why do recipient addresses matter for crypto transfers?
Because the path of funds is publicly traceable, but attribution to people requires authorities' involvement.
What characterizes the follow-up scheme?
Getting contacted again with an offer to recover the money for an upfront fee.