An exit scam in the world of cryptocurrencies refers to when promoters of a cryptocurrency disappear with investors' money during or after an initial coin offering (ICO).
The process involves promoters launching a new crypto platform, marketing the currency and concept, raising money from investors, possibly running the business for a short time, and then disappearing with the money and abandoning the project.
It is difficult to trace these scammers due to the decentralized, anonymous, and regulation-free operations of the virtual currency system.
An investor needs to take a cautious approach and do background checks on the claims made. Non-existent teams, extravagant profit projections, and unclear business models should be closely scrutinized before making any investment.
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