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Crypto Robot Scammers Turn Attention to Cannabis Trading

When it comes to the next big thing, it seems that online internet scammers are consistently looking for new markets and products that are making impressive gains in groundbreaking timing; we’re seeing exactly this as cryptocurrency trading robot scammers are now adapting their same scams, only in the Cannabis financial markets. These scams are attempts at garnering user funds so that they can enter either an ‘automated trading program’ with ‘guaranteed’ returns (Which is an immediate red flag). While the scammers initially started off in cryptocurrency type markets, they’ve since moved to cannabis stocks and trading markets because of how similar in exponential rise both markets have been. We’re seeing now, that these same mentioned scammers are leaving the cryptocurrency atmosphere to now attack the cannabis trading market.

What are cryptocurrency robot scams?

Cryptocurrency robot scams are essentially programs or outlets that are created to steal your funds by offering to trade your cryptocurrency/funds by depositing, and your deposit is automatically traded using algorithms (Or programmatically). After promising very large returns after buying and depositing Bitcoin in a guaranteed manner, they either do not process any deposit or funds at all or do process them and then function entirely as a Ponzi scheme in itself. In both of these cases, you’ll lose your money, in the former, however, you lose your money upon immediate deposit whereas with the Ponzi-like structure, you do not lose your money immediately, but rather over time. Both can usually be generally uncovered with some preliminary research/diligence.

This isn’t to say there is no legitimate cryptocurrency/Bitcoin trading robot, as a matter of fact, there are many legitimate robots and algorithmic trading is a very prominent portion of the cryptocurrency portion as a whole, however, scams within this niche are very prevalent. 

What are 'cannabis markets'?

Cannabis is brand new when it comes to stock/equities markets, and in the past year, it has shown an exponential rise; cannabis-related stocks in the United States equities markets have increased monumental amounts within just a short time span. This is due to multiple factors, however, it’s just most important to note that trading these niche market stocks, as well as derivatives (Which is where the most profit was made in these types of stocks), has made many people rich within short amounts of time.

Cannabis trading is therefore defined, in most mainstream perspectives, as the process of buying and selling different cannabis-centric stocks and market products. While the hype around cryptocurrency markets slowed down a bit in the previous year (Which seems to be picking up again now mid-2019), the talk and volume surrounding cannabis markets have increased. As we’ll explore later, there’s a slight correlation between cryptocurrency market participants and cannabis market participants.

 

Cryptocurrency Robot Scammers Decrease, Cannabis Trading Scammers Increase

In the case of both cryptocurrency and cannabis markets, both are fairly new to the general institutional side of the markets. Since they are both relatively new markets and have not yet undergone the full market growth cycle that other asset classes have, they are both extremely volatile and are making many people rich very quickly. As a result, products to facilitate this success are popping up in the market as well, as shown in multiple ‘cannabis traders‘.

Subsequently, there are increasing numbers of scammers that are entering the cannabis trading market that wish to dupe novice investors trying to get involved in a popular and talked about market. These scammers seem to be leaving the cryptocurrency market and entering the cannabis trading market. Institutional investors and retail-level investors alike are both trying to get a piece of the cannabis market gains, just as they were for cryptocurrency markets. There seems to be a very noticeable pattern in both of these cases, especially in terms of the scammers involved.

Because of the same type of market growth that both types of assets have shown (Crypto and cannabis), it seems scammers have felt that both markets can be approached and exploited, and this has become so apparent, that the SEC (The United States regulating financial market authority) has issued a public warning detailing how these scams are apparent in the cannabis market:

If this looks familiar, it’s because this is the same type of report and spotlight page that the SEC created for ICOs and the general cryptocurrency market which can be found here. UIn these cases, users would go online, buy cryptocurrency, send it to a specific ICO and in turn keep a form of cryptocurrency sort of like an ‘investment’. In both cases, many scammers and con artists promised immediate above-average returns without any risk imposed, and in both cases, scammers were simply taking advantage of a new market with no precedence.

Correlation Between Cannabis Trading Scams and Cryptocurrency Scams: Is Cryptocurrency Developing and Are Users Getting Smarter?

There are a few supporting reasons as towards why there’s such a vivid correlation between cryptocurrency and cannabis trading scams. Here are the main similarities between cryptocurrency markets and cannabis markets that would make sense as to why crypto market scammers are leaving for cannabis markets:

  • Both were in their infantile market stages when many new users who were inexperienced got involved
  • Crypto and cannabis markets have a large influx of novice investors
  • Crypto and cannabis markets have both made people large amounts of money within very short amounts of time when compared to the remainder of the financial markets
  • Both markets are fairly still unregulated and have no precedence

As a result, it might be concluded that these scammers are leaving for the cannabis markets also because crypto markets may be getting smarter, and scammers are not as successful as they once were.

Conclusion

Cryptocurrency markets were once so vulnerable to scammers and fraudsters that millions of dollars were being lost in the markets at rapid speeds. However, times have changed, and it seems that the market may be maturing, and also that these same scammers may have migrated to different markets, explicitly the cannabis stock and products market.

No matter what, increasing your knowledge about these types of markets, the forms of scams that they put in place, and how they can affect you in your financial market endeavors can be the deciding fact between losing a lot of money or not.

FAQ

Are 'cannabis traders' legitimate?

‘Cannabis traders’ are traditionally just programs that are created in order to scan certain cannabis-focused stocks and financial products based upon technical indicators to see if they would be favorable or unfavorable types of investments, at least at that time when looking at it.

These ‘traders’ can sometimes be algorithmic and based entirely automatically, meaning that the trader themselves do not have to do anything in particular but run the cannabis trader. This finitely seeks out the best undiscovered cannabis-related stocks or financial products.

How can I look out for cannabis market scammers?

You can look for scammers that are present within the cannabis markets by always doing extensive prior research and individual company or firm due diligence before engaging in any activity that could mean the loss of your funds. Also, try to read reviews and recommendations about stocks, markets, or ‘traders’ that you’re looking to possibly get involved with. In each case, try to siphon between efficient providers and disgruntled ones.

How many cannabis trading scammers are there?

There’s no finite amount of scammers that are out there in terms of just the cannabis markets, and the final amount changes per day, based on multiple different factors. In general, it’s believed that the scamming within the cannabis markets has become a notable problem, so much so that the SEC and multiple financial authorities have had to issue regulatory statements about looking out for scammers. 

 

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      John Iadeluca is the founder of the Wall Street hedge fund Banz Capital. He's a blockchain developer, quant, and consultant that specializes in the digital asset sector. He is an authority on blockchain and has written for a number of publications including Forbes.com.