What Are Crypto Scams Or Cryptocurrency Scams Using MLM?
There are so many variations right now of cryptocurrency scams or crypto scams for short.
In this writing, we will be talking about most of the companies that create a crypto bot with multi-level marketing.
Modus Operandi (MLM Companies With AI Crypto Trading Bot)
Companies let you know that they have an automated crypto trading bot with AI or Artificial Intelligence technology that consistently makes money for you.
These companies also sell you a package that you can choose from starting at $100 to $100,000 or sometimes even more.
These companies will sell these packages thru a multi-level marketing system or MLM so you also can earn substantial income when you get your family and friends to invest their money too.
Payments usually are done thru wallets such as TronLink, MetaMask, TrustWallet, CoinBase Wallet, or Binance Wallet.
The reasons behind their Modus Operandi?
1. They will entice you with how fast the money will come and will actually pay early members so it would look legit and will make it easy for the early members to entice their family and friends with the scam.
2. They usually do not have a feature for you to take out your principal money immediately.
3. The principal of your investment will pay for the interest that will be given to you in the next weeks or months.
3. They also use multi-level marketing or MLM to generate money to pay the interest due to existing members using new members' principal funds.
4. Crypto wallets are used so there are no chargebacks and the funds are available to them to pay existing members to recruit new members and of course the company.
What happens while the crypto scams are going on?
1. You can get the interest promised immediately sometimes even as fast as every day using smart contracts.
2. Since you got paid, the legitimacy of the company seems real so you then invite everyone you know to join because you feel you are sharing the blessings and also will generate income doing so.
3. The members you got in now make money and also started inviting others.
4. This goes on for a few months even a few years depending on how many people are joining on a monthly basis.
5. After some months or so the company increases the interest you are getting. For example, 1% per day turns to 2% or even 3% per day. Be warned this is a strategy to entice you to put more money in but this is a warning that the company is about to close down.
6. Now the interest you are getting is not stopped for some reason and usually they will say it is a technical error. (Warning if the program is working fine before and nothing has been updated, there is no reason it will not work the next day.)
7. They prolong this excuse as long as they could to continue generating income until such time that their members just had enough of their excuses.
8. By this time their website will go offline never to come back again.
9. Since they still have the software and people are still getting enticed by making a lot of money fast. They now deploy their existing website using another name, another company, and maybe another person in charge.
10. Now it starts all over again to number 1.
How to make sure that the MLM crypto trading bot you join is not a scam?
1. If the company is asking for investment funds, this is already a red flag.
- a. You can request some papers from SEC or Securities and Exchange Commission certifying that they are fully compliant to be an investment company. As an investment company, they have to go thru a rigorous process before they can start.
- b. Most exchanges have an API or Application Protocol Interface for software to connect to their system and do the trade and read your wallet info. You can also control their access to your exchange so they cannot do withdrawals or transfers.
- c. Most exchanges can return your full funds in a matter of hours or days if you change your mind.
2. If the company promise to make you so much money in a short amount of time is another red flag.
- a. One of the SEC's rules is companies cannot make promises of a certain percentage to be made in any period of time as investments are unpredictable.
Why this modus operandi will never work?
If you are making 3% per day you will be a millionaire in 14 months with an investment of $100.
| Date | Compound @ 3% Daily |
| 2012-01-01 | $100.00 |
| 2012-02-01 | $190.00 |
| 2012-03-01 | $361.00 |
| 2012-04-01 | $685.90 |
| 2012-05-01 | $1,303.21 |
| 2012-06-01 | $2,476.10 |
| 2012-07-01 | $4,704.59 |
| 2012-08-01 | $8,938.72 |
| 2012-09-01 | $16,983.56 |
| 2012-10-01 | $32,268.77 |
| 2012-11-01 | $61,310.66 |
| 2012-12-01 | $116,490.26 |
| 2013-01-01 | $221,331.49 |
| 2013-02-01 | $420,529.83 |
| 2013-03-01 | $799,006.69 |
| 2013-04-01 | $1,518,112.70 |
If you are making 1% per day you will be a millionaire in 3 years with an investment of $100.
| Date | Compound @ 1% Daily |
| 2012-01-01 | $100.00 |
| 2012-02-01 | $130.00 |
| 2012-03-01 | $169.00 |
| 2012-04-01 | $219.70 |
| 2012-05-01 | $285.61 |
| 2012-06-01 | $371.29 |
| 2012-07-01 | $482.68 |
| 2012-08-01 | $627.49 |
| 2012-09-01 | $815.73 |
| 2012-10-01 | $1,060.45 |
| 2012-11-01 | $1,378.58 |
| 2012-12-01 | $1,792.16 |
| 2013-01-01 | $2,329.81 |
| 2013-02-01 | $3,028.75 |
| 2013-03-01 | $3,937.38 |
| 2013-04-01 | $5,118.59 |
| 2013-05-01 | $6,654.17 |
| 2013-06-01 | $8,650.42 |
| 2013-07-01 | $11,245.54 |
| 2013-08-01 | $14,619.20 |
| 2013-09-01 | $19,004.96 |
| 2013-10-01 | $24,706.45 |
| 2013-11-01 | $32,118.39 |
| 2013-12-01 | $41,753.91 |
| 2014-01-01 | $54,280.08 |
| 2014-02-01 | $70,564.10 |
| 2014-03-01 | $91,733.33 |
| 2014-04-01 | $119,253.33 |
| 2014-05-01 | $155,029.33 |
| 2014-06-01 | $201,538.13 |
| 2014-07-01 | $261,999.56 |
| 2014-08-01 | $340,599.43 |
| 2014-09-01 | $442,779.26 |
| 2014-10-01 | $575,613.04 |
| 2014-11-01 | $748,296.96 |
| 2014-12-01 | $972,786.04 |
| 2015-01-01 | $1,264,621.86 |
These are easy ways and in a very short time to be a millionaire. Some people work all their life and have nowhere near this much after 40 years of working.
I also don't understand why people will put tens of thousands even hundreds of thousand on these investments when companies are not compliant at all nor they are even registered in the United States. But I have known people who did this only to find out they made a really bad mistake.
To illustrate why it will never work please check out the table below.
| Date | Compound @ 1% Daily | Compound @ 3% Daily |
| 2012-01-01 | $1.00 | $1.00 |
| 2012-02-01 | $1.30 | $1.90 |
| 2012-03-01 | $1.69 | $3.61 |
| 2012-04-01 | $2.20 | $6.86 |
| 2012-05-01 | $2.86 | $13.03 |
| 2012-06-01 | $3.71 | $24.76 |
| 2012-07-01 | $4.83 | $47.05 |
| 2012-08-01 | $6.27 | $89.39 |
| 2012-09-01 | $8.16 | $169.84 |
| 2012-10-01 | $10.60 | $322.69 |
| 2012-11-01 | $13.79 | $613.11 |
| 2012-12-01 | $17.92 | $1,164.90 |
| 2013-01-01 | $23.30 | $2,213.31 |
| 2013-02-01 | $30.29 | $4,205.30 |
| 2013-03-01 | $39.37 | $7,990.07 |
| 2013-04-01 | $51.19 | $15,181.13 |
| 2013-05-01 | $66.54 | $28,844.14 |
| 2013-06-01 | $86.50 | $54,803.87 |
| 2013-07-01 | $112.46 | $104,127.35 |
| 2013-08-01 | $146.19 | $197,841.97 |
| 2013-09-01 | $190.05 | $375,899.73 |
| 2013-10-01 | $247.06 | $714,209.50 |
| 2013-11-01 | $321.18 | $1,356,998.04 |
| 2013-12-01 | $417.54 | $2,578,296.28 |
| 2014-01-01 | $542.80 | $4,898,762.93 |
| 2014-02-01 | $705.64 | $9,307,649.57 |
| 2014-03-01 | $917.33 | $17,684,534.18 |
| 2014-04-01 | $1,192.53 | $33,600,614.94 |
| 2014-05-01 | $1,550.29 | $63,841,168.39 |
| 2014-06-01 | $2,015.38 | $121,298,219.95 |
| 2014-07-01 | $2,620.00 | $230,466,617.90 |
| 2014-08-01 | $3,405.99 | $437,886,574.00 |
| 2014-09-01 | $4,427.79 | $831,984,490.61 |
| 2014-10-01 | $5,756.13 | $1,580,770,532.16 |
| 2014-11-01 | $7,482.97 | $3,003,464,011.10 |
| 2014-12-01 | $9,727.86 | $5,706,581,621.09 |
| 2015-01-01 | $12,646.22 | $10,842,505,080.06 |
| 2015-02-01 | $16,440.08 | $20,600,759,652.12 |
| 2015-03-01 | $21,372.11 | $39,141,443,339.03 |
| 2015-04-01 | $27,783.74 | $74,368,742,344.16 |
| 2015-05-01 | $36,118.86 | $141,300,610,453.90 |
| 2015-06-01 | $46,954.52 | $268,471,159,862.41 |
| 2015-07-01 | $61,040.88 | $510,095,203,738.58 |
| 2015-08-01 | $79,353.15 | $969,180,887,103.31 |
| 2015-09-01 | $103,159.09 | $1,841,443,685,496.28 |
| 2015-10-01 | $134,106.82 | $3,498,743,002,442.93 |
| 2015-11-01 | $174,338.86 | $6,647,611,704,641.57 |
| 2015-12-01 | $226,640.52 | $12,630,462,238,818.97 |
| 2016-01-01 | $294,632.68 | $23,997,878,253,756.05 |
| 2016-02-01 | $383,022.48 | $45,595,968,682,136.49 |
| 2016-03-01 | $497,929.22 | $86,632,340,496,059.33 |
| 2016-04-01 | $647,307.99 | $164,601,446,942,512.72 |
| 2016-05-01 | $841,500.39 | $312,742,749,190,774.12 |
| 2016-06-01 | $1,093,950.50 | $594,211,223,462,470.75 |
| 2016-07-01 | $1,422,135.65 | $1,129,001,324,578,694.25 |
| 2016-08-01 | $1,848,776.35 | $2,145,102,516,699,519.00 |
| 2016-09-01 | $2,403,409.25 | $4,075,694,781,729,086.00 |
| 2016-10-01 | $3,124,432.03 | $7,743,820,085,285,263.00 |
| 2016-11-01 | $4,061,761.64 | $14,713,258,162,042,000.00 |
| 2016-12-01 | $5,280,290.13 | $27,955,190,507,879,800.00 |
| 2017-01-01 | $6,864,377.17 | $53,114,861,964,971,616.00 |
| 2017-02-01 | $8,923,690.32 | $100,918,237,733,446,064.00 |
| 2017-03-01 | $11,600,797.42 | $191,744,651,693,547,520.00 |
| 2017-04-01 | $15,081,036.65 | $364,314,838,217,740,288.00 |
| 2017-05-01 | $19,605,347.64 | $692,198,192,613,706,496.00 |
| 2017-06-01 | $25,486,951.94 | $1,315,176,565,966,042,368.00 |
| 2017-07-01 | $33,133,037.52 | $2,498,835,475,335,480,320.00 |
| 2017-08-01 | $43,072,948.77 | $4,747,787,403,137,412,096.00 |
| 2017-09-01 | $55,994,833.40 | $9,020,796,065,961,082,880.00 |
| 2017-10-01 | $72,793,283.42 | $17,139,512,525,326,057,472.00 |
| 2017-11-01 | $94,631,268.45 | $32,565,073,798,119,505,920.00 |
| 2017-12-01 | $123,020,648.99 | $61,873,640,216,427,061,248.00 |
| 2018-01-01 | $159,926,843.68 | $117,559,916,411,211,415,552.00 |
| 2018-02-01 | $207,904,896.79 | $223,363,841,181,301,669,888.00 |
| 2018-03-01 | $270,276,365.82 | $424,391,298,244,473,126,912.00 |
| 2018-04-01 | $351,359,275.57 | $806,343,466,664,498,954,240.00 |
| 2018-05-01 | $456,767,058.24 | $1,532,052,586,662,547,947,520.00 |
| 2018-06-01 | $593,797,175.72 | $2,910,899,914,658,840,838,144.00 |
| 2018-07-01 | $771,936,328.43 | $5,530,709,837,851,797,749,760.00 |
| 2018-08-01 | $1,003,517,226.96 | $10,508,348,691,918,415,200,256.00 |
| 2018-09-01 | $1,304,572,395.05 | $19,965,862,514,644,989,509,632.00 |
| 2018-10-01 | $1,695,944,113.57 | $37,935,138,777,825,475,035,136.00 |
| 2018-11-01 | $2,204,727,347.64 | $72,076,763,677,868,400,050,176.00 |
| 2018-12-01 | $2,866,145,551.93 | $136,945,850,987,949,949,190,144.00 |
| 2019-01-01 | $3,725,989,217.51 | $260,197,116,877,104,893,394,944.00 |
| 2019-02-01 | $4,843,785,982.76 | $494,374,522,066,499,287,384,064.00 |
| 2019-03-01 | $6,296,921,777.59 | $939,311,591,926,348,652,740,608.00 |
| 2019-04-01 | $8,185,998,310.86 | $1,784,692,024,660,062,252,302,336.00 |
| 2019-05-01 | $10,641,797,804.12 | $3,390,914,846,854,118,306,217,984.00 |
| 2019-06-01 | $13,834,337,145.35 | $6,442,738,209,022,824,620,752,896.00 |
| 2019-07-01 | $17,984,638,288.96 | $12,241,202,597,143,366,135,185,408.00 |
| 2019-08-01 | $23,380,029,775.65 | $23,258,284,934,572,395,871,600,640.00 |
| 2019-09-01 | $30,394,038,708.34 | $44,190,741,375,687,547,861,073,920.00 |
| 2019-10-01 | $39,512,250,320.85 | $83,962,408,613,806,332,346,105,856.00 |
| 2019-11-01 | $51,365,925,417.10 | $159,528,576,366,232,021,149,679,616.00 |
| 2019-12-01 | $66,775,703,042.23 | $303,104,295,095,840,812,696,600,576.00 |
| 2020-01-01 | $86,808,413,954.90 | $575,898,160,682,097,516,635,750,400.00 |
| 2020-02-01 | $112,850,938,141.37 | $1,094,206,505,295,985,247,248,187,392.00 |
| 2020-03-01 | $146,706,219,583.79 | $2,078,992,360,062,371,983,515,451,392.00 |
| 2020-04-01 | $190,718,085,458.92 | $3,950,085,484,118,506,576,264,822,784.00 |
| 2020-05-01 | $247,933,511,096.60 | $7,505,162,419,825,161,835,196,186,624.00 |
| 2020-06-01 | $322,313,564,425.58 | $14,259,808,597,667,806,827,165,777,920.00 |
| 2020-07-01 | $419,007,633,753.25 | $27,093,636,335,568,832,971,614,978,048.00 |
| 2020-08-01 | $544,709,923,879.23 | $51,477,909,037,580,776,928,607,993,856.00 |
| 2020-09-01 | $708,122,901,043.00 | $97,808,027,171,403,473,525,527,281,664.00 |
| 2020-10-01 | $920,559,771,355.89 | $185,835,251,625,666,597,939,283,230,720.00 |
| 2020-11-01 | $1,196,727,702,762.66 | $353,086,978,088,766,500,900,266,049,536.00 |
| 2020-12-01 | $1,555,746,013,591.46 | $670,865,258,368,656,309,489,258,987,520.00 |
| 2021-01-01 | $2,022,469,817,668.90 | $1,274,643,990,900,446,917,660,847,898,624.00 |
| 2021-02-01 | $2,629,210,762,969.57 | $2,421,823,582,710,849,115,408,113,336,320.00 |
| 2021-03-01 | $3,417,973,991,860.44 | $4,601,464,807,150,613,037,800,438,628,352.00 |
| 2021-04-01 | $4,443,366,189,418.57 | $8,742,783,133,586,163,983,690,898,604,032.00 |
| 2021-05-01 | $5,776,376,046,244.14 | $16,611,287,953,813,710,217,932,819,136,512.00 |
| 2021-06-01 | $7,509,288,860,117.38 | $31,561,447,112,246,048,062,992,468,148,224.00 |
| 2021-07-01 | $9,762,075,518,152.59 | $59,966,749,513,267,484,113,926,285,688,832.00 |
| 2021-08-01 | $12,690,698,173,598.37 | $113,936,824,075,208,216,213,580,240,912,384.00 |
| 2021-09-01 | $16,497,907,625,677.88 | $216,479,965,742,895,612,607,242,308,681,728.00 |
| 2021-10-01 | $21,447,279,913,381.25 | $411,311,934,911,501,649,542,241,578,909,696.00 |
| 2021-11-01 | $27,881,463,887,395.62 | $781,492,676,331,853,069,278,424,365,793,280.00 |
| 2021-12-01 | $36,245,903,053,614.31 | $1,484,836,085,030,520,831,629,006,295,007,232.00 |
| 2022-01-01 | $47,119,673,969,698.61 | $2,821,188,561,557,989,522,449,036,730,171,392.00 |
| 2022-02-01 | $61,255,576,160,608.20 | $5,360,258,266,960,180,323,237,470,708,695,040.00 |
| 2022-03-01 | $79,632,249,008,790.66 | $10,184,490,707,224,342,614,151,194,346,520,576.00 |
| 2022-04-01 | $103,521,923,711,427.86 | $19,350,532,343,726,249,929,257,915,112,226,816.00 |
| 2022-05-01 | $134,578,500,824,856.22 | $36,766,011,453,079,872,098,578,427,656,798,208.00 |
| 2022-06-01 | $174,952,051,072,313.09 | $69,855,421,760,851,750,992,107,188,592,312,320.00 |
| 2022-07-01 | $227,437,666,394,007.03 | $132,725,301,345,618,313,049,945,603,043,229,696.00 |
| 2022-08-01 | $295,668,966,312,209.12 | $252,178,072,556,674,778,192,826,979,443,539,968.00 |
| 2022-09-01 | $384,369,656,205,871.88 | $479,138,337,857,682,037,983,534,298,781,712,384.00 |
| 2022-10-01 | $499,680,553,067,633.44 | $910,362,841,929,595,768,866,948,354,911,764,480.00 |
| 2022-11-01 | $649,584,718,987,923.50 | $1,729,689,399,666,231,813,273,249,284,655,939,584.00 |
In this table, if you put $1 on January 01, 2012, at 1 percent per day you will have $47 trillion on January 10, 2022.
Google's record of worldwide dollars in circulation is over $40 trillion. This would mean that you would have all the dollars circulating worldwide.
If you go further down on the table or go to the 3% column you will have all the money that was printed and money that has not been printed.
The average percentage of Bitcoin is around 5% per month from October 2008 to September 2022. This average cannot be consistent all the time as there is a big jump in interest when people are just adapting to it.
Also if the average is 5% how can companies give more than what it makes? When banks make 5% per year they only give their depositors 10% of the 5% which is 0.5% per year.
This is because there are a lot of factors to consider, such as expenses in operations, rents, salaries, default on loans, etc. There are reasons why they only give 1/10 of their income.
There are already existing practices on investments and if what they are stating to you is too good to be true, it is most likely not true.
Investments require some knowledge and if you want to get into it, you must start learning as much as you can so you do not get scammed.
Conclusion
Companies are taking advantage of the laziness or the lack of information people along with their greed and envy.
Most people that are falling for these scams are seniors that are looking to generate income using their money as they are not able to work anymore.
There is a lot of money to be made on the automated crypto trading bot and selling them as the company's partners, you just make sure that you learn the proper way and not take the easy route as there are wolves waiting for you there.
We create MaticMinds so you can make money on trading crypto as well as selling our software to generate money as our partners.
Should you decide to participate in this lucrative business, make sure you do your investigation to avoid falling into any crypto scams.
By Jun Bulatao On December 17, 2022
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