Crypto trading is among the modern business options, and many firms, companies, and users are investing in cryptos. There are millions of crypto investors all around the world who are willing to take the most profit from their investment. The crypto market is valued at more than 2 trillion and also attracts many frauds, hackers, and scammers. Suppose you are willing to do trading in crypto without any security risk. In that case, Kucoin is the best Crypto exchange platform because it has constantly updated security features to ensure maximum safety. Although KuCoin is the safest platform from hackers and security threats, there are still scams worldwide that are not technical. It is the responsibility of the users to understand these frauds and stay away from them. In this article, we are going to discuss the pyramid schemes from KuCoin. So let’s begin.
What Is The Pyramid Scheme?
The pyramid scheme is not a new scam, and it is also not only limited to crypto trading. It is a sketchy scheme in which the profit is earned through scamming others. Usually, the scammer recruits the people by promising them quick and easy returns in a short time and by charging recruitment fees to take part in the business.
Then the recruiter asks the recruits to spread the word and get more recruits, and they will earn a commission from it. For the profit and commission, the second levels recruit hire the second-level recruit and charge fees. Part of that fee goes to the original level 1 recruiter, and the cycle goes on.
All of the above levels earn their commission for each level, and the scheme is based on earning the commission by recruiting new users. Each user that is added must pay a fee that everyone shares to the top level, and the only way for recruits to level their losses is to recruit new users.
After some time, there is no one left to recruit, and the scheme ends. The upper-level recruits and original scammer earn the most reward while the lower level ends up in losses.
Why Is It Called a Pyramid Scheme?
The scheme works similarly to the pyramid. The first user and original scammer are at the top of the pyramid and hire 10 people who are level 2 of the pyramid. Each recruit hires 10, so the total in level 3 is 100, and then the cycle continues until there is no one left to recruit.
How To Identify Pyramid Scheme?
Kucoin provides complete guidance to their users, and it is important to understand the pyramid scheme. First of all, it is not safe to invest in the schemes outside the official KuCoin, and there are many ways to earn risk-free income from KuCoin. If a person is asking for a fee to enter into their investment plans, then it is probably a block of a pyramid scheme, and once you enter into the scheme, there is no way of recovering the lost amount unless you spread the word and scam other people. You should only invest in the authentic KuCoin schemes, such as referral programs, crypto lending, Ethereum price and etc that will provide you passive income.