What's up guys and welcome to wall street millennial, the recent price volatility of cryptocurrencies in 2021 has made many people turn to crypto trading as a source of investment returns. The rise of bitcoin has also spurred significant hype around various altcoins. Many investors view altcoins as a high risk high reward investment vehicle with the potential to make 10 bagger gains, while some altcoin projects may be legitimate and have real use in applications. A large portion of them are scams designed purely to extract money from unsuspecting individual investors.

In this video we'll go over the top 3 altcoin scams of 2021 and show you what you can do to avoid them when a developer creates a new altcoin, they sell the coins to the general public via an initial coin, offering it is analogous to an initial Public offering in the stock market, except there is very little regulation. Sometimes the altcoin developer will use the money raised to fund further development of the crypto project other times, they'll simply pocket the money that they made from selling the coins. Anybody with decent programming skills can develop an altcoin, so there's a lot of supply on the market. Since the release of bitcoin, there have been more than 10 000 different altcoins created with the number growing every day.

With such a crowded field, it is very difficult to stand and convince investors to buy into your coin. There are two main ways to stand out as an altcoin. Firstly, you can claim your all coin will be used in some decentralized finance application, which will revolutionize the financial system and support the valuation of your coin. Secondly, you can get celebrities with large social media followings to endorse your coin.

Increasing demand from investors in 2018, a new crypto startup called centra tech did both of these things. Central was planning on raising money. Through an ico, they promised to use the funds to create a crypto debit card supported by visa and mastercard, which would allow users to convert cryptocurrencies into dollars. This would be a real game, changer, as it would allow users to use their crypto assets for day-to-day transactions.

They also scored high-profile celebrities, including floyd mayweather mayweather posted to his millions of instagram followers telling them that he was using the central debit card to spend his bitcoin and that his followers should buy into central's ico. He appeared to be very bullish on crypto saying he would eventually come to be known as floyd crypto mayweather dj khaled also posted that centra is the ultimate winner in cryptocurrency and encouraged his followers to buy coins in the ico, with the hype from two mega celebrities And the promises of the crypto debit card centro was able to raise 32 million dollars in their ico. Unfortunately, the coin was a complete scam. There was no debit card and they had no relationship with either visa or mastercard.

Instead of using the funds to develop new blockchain products, the developers pocketed the money for themselves. The entire project was a scam and anybody who bought the coins lost everything. So why did floyd mayweather and dj khaled agreed to promote this worthless coin? It turns out that centre paid the boxing star 100 000 to promote the ico. He did not disclose this payment to his followers.

They also paid dj khaled 50 000 for his instagram post. He similarly did not disclose this after central was shut down by the authorities. Both floyd mayweather and dj khaled settled out of court with the sec paying 614 thousand and 142 thousand dollars respectively. You should be very careful when you see a celebrity promoting an altcoin with limited regulation.

There are many pumping dump schemes where unsuspecting individual investors end up. Holding the bag, when you think of an altcoin trader, you typically think of a younger investor who does some research online and puts a few thousand dollars into an altcoin? However, not even the most sophisticated investors in the world are immune from being scammed. The billionaire investor and entrepreneur mark cuban has recently gotten involved in a shady new altcoin, where he lost 100 of his invested capital. He invested in the iron titanium token, which reached a high of 64 dollars per coin on june 16th, only to fall 99.999 percent to less than one one thousandth of a cent while iron titanium is not necessarily a scam.

It was a complete disaster for anyone who held on to it, and obviously it did not go as planned. Iron, titanium or titan was a share token that the iron dot finance project was using to finance their iron. Stablecoin iron would be a partially collateralized stablecoin, backed by coinbase's usdc, as well as iron dot, finance's own titan coin. Titan coin was supposed to be a liquidity token that benefits from the growth of the iron coin's farming pools.

Supposedly, any influx of total locked value into iron farms creates inherent and constant demand. For the titan token, this will drive up the price and increase the yield of the farms. In early june this seemed to be working. The iron stablecoin was growing, with a total locked value, reaching 2.3 billion dollars by june 15th.

Just a few days before titan's 100 crash, the iron finance team posted this article saying titan coin was a bear-proof asset that can appreciate in value and provide yield to its holders, regardless of the direction of the overall crypto markets. They further brag that their titan token, as well as their similar steel token offer by far the best returns on any stablecoin pairs and the absolute highest annual percentage rates of yield at its peak titan yield farms were offering over hundred percent per year. A bear proof token that offers high appreciation and evils more than one hundred percent seems like a surefire investment. Naturally, it got a lot of buy-in from all coin investors.

Titan coin was given an even further boost when mark cuban puts on his blog that he was investing in the project in the post. He disclosed that he owned dai token, as well as titan token, which he provided to a liquidity pool on the quickswap crypto platform. By providing this liquidity, he received a yield of 206 percent on his titan holdings. A 206 percent yield seems quite good compared to the 0.7 high yielding savings account such as sally may can offer, with the high profile endorsement of mark cuban titan coin, quickly shot up to the moon.

Just days after the mark, cuban blog post in iron finance's article calling the coin bear proof. Titan reached a peak of 64 dollars per coin. However, when something sounds too good to be true, it usually is when the coin reached 64.. Titan whale saw this as an opportunity to dump all their shares at a good price.

This caused titan to decline in value by roughly 100 over the next few days. The total value locked into the iron stablecoin declined for more than two billion dollars at the peak to just 4.6 million dollars as of july 3rd 2021, with so little value in the iron stablecoin. The ability to make any yield on the titan coin has declined basically to zero, and thus it has no value the iron coin, which was supposed to be a stable coin picked one us dollar has also seen its value declined to less than 80 cents. This is because investors have lost confidence in iron, finance's ability to make good on the coin supposed value of one dollar.

The bold case for titan relied on the total value locked into the iron stablecoin. To increase constantly the moment that total, lock value starts to decrease the valuation support for titan collapses, the whales foresaw that this would happen and dump their coins ahead of it. Despite being a sophisticated investor mark cuban was one of the investors left holding the bag on titan based on his tweet. It looks like he got out of the coin, but bought back in when he thought that the total value lock was increasing enough.

It looks like he lost 100 of his investment. The shark tank star blames his loss on laziness, saying that he failed to do his proper due diligence before buying the coin. The moral of the story is that even the most sophisticated investors can be duped by shady altcoins preaching high returns. If an investment looks too good to be true, it's usually best to just sit on the sidelines.

The last entry on this list is the biggest crypto scam by far, which stole 4 billion dollars from unsuspecting victims over the course of three years. One coin was started in 2014 by dr ruja ignatova, who hails from bulgaria. She claimed to have created a new cryptocurrency ecosystem called onecoin, which will allow users to send and receive payments across the world anonymously and instantly with almost no transaction costs she claimed the platform would be secure and completely safe. She even went so far as to say that onecoin was the bitcoin killer, as it would be far superior to the traditional blockchain technologies.

Prospective investors were sold educational packages, giving access to onecoin university, onecoin university, taught users about crypto in trading, but most of the material was plagiarized and largely useless. However, they charge exorbitant prices of up to 225 000 euros for the top tier of these packages. People purchased the educational programs because they were necessary to mine onecoins. The onecoin promoters marketed the packages as investments that would pay for themselves many times over once the onecoin could be cashed out.

However, onecoin was not traded on any legitimate crypto exchange. It could only be bought and sold through their x coin x, exchange, which was internal to the company. The victims who mined the onecoins had them stuck in x coin x, while users were technically allowed to withdraw their onecoins in exchange for euros. The transactions were limited, based on how many educational packages the user, had purchased.

This greatly limited the number of onecoins. That could be withdrawn and forced people to buy more worthless packages, digging them even deeper into the hole. Onecoin fueled, its growth. By running a multi-level marketing scheme, people could be awarded more onecoins if they referred new people to buy the educational packages.

This motivated people to start onecoin events around the world to recruit new people into the scam and raise even more money. It was pretty easy for them to attract new users, because the organization looked quite legit. They put on elaborate presentations with live audiences of tens of thousands. In some cases, these events cost millions of dollars to run so people automatically assume that such a company was legit at the presentations.

They rarely talked about onecoin's technology, because the technology didn't really exist. They spent most of the time talking about how much money people were making when they bought into the system and started mining one coins. And it is true that a few people who got in early were able to make thousands of euros mainly by recruiting other people to put more money in also the founder, dr ruja inatova was a very well-spoken woman who seemed to be legit. She had a phd and claimed to have worked at the prestigious consulting company mckinsey before leaving to start onecoin by 2017.

Onecoin had successfully raised more than four billion dollars from investors all around the world, but people eventually started to get suspicious their one coins, which were supposed to be worth millions of dollars, were still stuck in the x coin x. Internal exchange onecoin had promised that they would eventually open it up, so people could cash out, but this had still not happened. Three years after its launch in 2014., suspecting that it was a pyramid scheme, bulgarian police raided onecoin's headquarters, seizing internal documents and servers after analyzing. The documents they found out that the whole thing was a total scam.

There was no blockchain technology or global payments network, like the company claimed dr raju never had any intention of letting people cash in on the onecoins they had mined. She pocketed the billions of euros that they made selling the scam educational packages. The x-coin x exchange wasn't a real exchange, the money that people thought they had within it didn't actually exist after the scam was uncovered warrants were issued in many countries for the rest of ruja, as well as other high-ranking individuals within the scam rouge's brother constantine ignatov, Who was also involved in the scam, was arrested and now faces up to 90 years of prison time. However, dr ruja took billions of dollars of the ill-gotten prophets and disappeared.

She is now an international fugitive and nobody is certain of her current whereabouts. One coin will go down as one of the single biggest scams in history where millions of people lost billions of dollars. There are thousands of altcoins and new ones being launched every day. They can be very enticing as many see their prices shoot to the moon minting millions for the few who are lucky enough to get in early, but the vast majority of all coins either won't live up to the hype or are outright scams.

Alright guys that wraps it up for this video are there any other crypto scams that you think we should have included? Let us know in the comments section below, as always. Thank you so much for watching and we'll see in the next one wall. Street millennial signing out.