What is the best card for multiple cryptocurrencies
Crypto currencies: dubious business around Bitcoin & Co.
The soaring of Bitcoin stocks has sparked a real hype about cryptocurrencies. In addition to reputable providers, there are also black sheep at the start who take advantage of the gold digger mood around Bitcoin, Ethereum, Ripple, Cardano & Co. Dubious companies and private individuals present themselves in Facebook groups, on Instagram and in messenger services or contact consumers unsolicited by e-mail. They promise financial freedom, high returns or permanent passive income through crypto mining, trading or investments in new, supposedly future-oriented cryptocurrencies.
Business models unclear, cryptocurrency providers often abroad
The offers are often completely non-transparent and the business models incomprehensible. More detailed information is often only available after contacting or registering on the advertising websites. Often, however, the provider imprint is missing entirely on the websites or the providers are based abroad - also on Caribbean island states. If you have to try to enforce your rights over this distance, you have high costs and bad cards in case of doubt.
Consumers are increasingly complaining about providers who lure them into dubious investments with deals in Bitcoins, Ethereum, Ripple, Cardano and other cryptocurrencies. The market watchdog experts at the Hessen Consumer Center are currently investigating complaints about almost 20 different providers and six different currencies.
New motto, old scam: pyramid schemes
Many offers seem to be based on forbidden pyramid schemes. As a participant, for example, you should pay an entry fee or, as an "agent", recruit new prospects. For this you should receive commissions. Pyramid schemes like to promise investors high returns. But you need a steadily growing number of participants, because the payments to the members are financed by the contributions of the new participants. These constructs inevitably break down.
As with other investment offers, fraud cannot be ruled out either: if the provider has collected a large amount of money from bona fide investors, it disappears, never to be seen again.
Six signs by which you can recognize dubious cryptocurrency providers
- Exaggerated promises
Ignore offers with conspicuously high returns or permanent passive income.
- Headquartered abroad
Make sure that the provider is not based abroad. In case of doubt, this can make it even more difficult for you to enforce your rights.
- Refer friends
Ignore requests to recruit new prospects yourself, even if you are promised high commissions or returns.
- No imprint
Check whether the provider's website has an imprint.
- Lack of transparency
Do not trust opaque and incomprehensible business models about which you should only receive more information after contacting or registering.
- Unsolicited contact
If you are contacted without having shown interest in cryptocurrencies beforehand, you should be suspicious.
Investing in cryptocurrencies is high risk
But you should be extremely careful even with presumably reputable offers. Cryptocurrencies are subject to high price fluctuations. A total loss cannot be ruled out. Bitcoin, Ethereum & Co. are not legal tender, but substitute currencies. Where they will be accepted as a means of payment and whether they will be able to assert themselves on the market can hardly be reliably predicted.
The Federal Government and the Federal Financial Supervisory Authority (BaFin) also point out the risks for investors and the potential for fraud on their websites. Transactions with "OneCoins" - an alleged crypto currency - for example, has been banned by BaFin and the accounts of a company involved in trading have been blocked.
Investments without risk and effort, but with enormous profits in a short time, simply do not exist. If you want to build up assets, you can use suitable strategies such as a suitable diversification of your investments to reduce risks. Above all, it is important that you have a long investment horizon and that you compare different types of investment with one another. We use a checklist to show you how you can prepare for an interview with a financial advisor.
This content was created by the joint editorial team in cooperation with the consumer centers Hessen and North Rhine-Westphalia for the network of consumer centers in Germany.
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