After cryptocurrency prices spiked, scammers have flooded the market with fake tokens that promise investors great riches, but leave them penniless. It's working.
Ryan has been self-employed for 15 years. He works long hours, on two small manufacturing businesses. But he finds time to daydream about getting in early on a cryptocurrency that goes to the moon. In 2021, the price of Dogecoin, a crypto token started as a joke, increased 70-fold in the span of four months. The total value of the coins in circulation reached $70 billion. “Imagine being one of the early adopters of Dogecoin,” says Ryan.
The type of swindle Ryan suspects he has been caught in is known as a token presale scam. The format has been around for a while, but amidst the FOMO that comes with skyrocketing cryptocurrency prices, people are particularly vulnerable. “These scams are broadly correlated to recent events,” says Ben-Natan. “They aren’t new phenomena, but they resurface.” There are variations on the theme, explains Ben-Natan, but the scams tend to pull from the same playbook.
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