The cryptocurrency industry has been dealing with the issue of scams and hack attacks for a long time now. The Stellar (XLM) ecosystem also ha’d a share of these scams whose only purpose is to dupe users who end up losing their funds. This article will explore scams in regards to the Stellar Network as well as try to educate the users to be alert and always protect themselves.
Not long ago we came across a suggested hard fork on the Stellar network referred to as Stellar Activity. According to a Medium post by The Stellar Guard, the hard fork “promised to improve upon the original Stellar by implementing the Lightning Network as well as a few other minor details.”
Stellar Activity had a logo that was elegantly designed in addition to having a telegram channel that was relatively active with a good following. The platform promised the users that for every 1 XLM token, they will get 2 XLA. Hard forks that result in new tokens are not unheard of in the crypto sphere. In fact, we just witnessed a hard fork on Bitcoin Cash (BCH) network that saw the chain split into two; Bitcoin ABC and Bitcoin SV. On the contrary, Stellar activity is a total scam that seeks to make away with your hard earned money.
Red Flags to Watch Out For
The people behind Stellar Activity use various methods to ensure that they reach as many people as possible. The first being bounty promises to users who share their tweets and posts. The only way for Stellar Activity to make money is to get as many people to believe in the hard fork scam. Therefore, it is essential to them that users spread the word and for this they promise a bounty reward, making the deal harder to refuse.
Traffic is also directed to the telegram channel where users are fooled that an active community is available. The bounty program requires users to re-share their posts on all social media platforms including Twitter, Facebook and Instagram. There was an instance where a user was bashed by the scammer for only sharing on Twitter.
It is essential to note that a legit project at its initial phase focuses on building both the technology and the community. However, for this hard fork scam, there is no technology development except the viral activities being conducted on social platforms.
Another red flag that users can spot directly is the too good to be true deals offered. First, there is the 1:2 hard fork deal. However, users are also being promised a 1:30 deal if they send their XLM coins to Stellar address that has been provided. Imagine sending your XLM token to that address; an established cryptocurrency in return for XLA tokens that do have value simply because they do not exist. While many will see it as an ICO, the XLA team promises the users that they will receive the tokens after the hard fork has been completed. In addition to that, they make up fake deadlines to increase the urgency. However, after the time elapses the deadlines are extended! Makes no sense to me!
The Red flags in this project are immense and easy to spot. Users need to be vigilant and understand that when a deal is too sweet, think twice before diving in. You might end up drowning with no one to save you.