Crypto scammers will try anything to separate unsuspecting investors with their cash, particularly those who don’t fully understand how digital currencies work.
A popular scam which continues to catch people out is USDT (Tether) mining schemes. However, it’s impossible to mine Tether so if anyone approaches you about this, block them.
Victims are first told to set up an account with a legitimate crypto exchange and convert fiat currency (cash) into Tether, which is a popular stablecoin.
They’re then told to transfer the crypto across to a platform that the scammers claim offers ‘USDT mining’, ‘Tether mining’, ‘USDT liquidity mining’ or ‘Tether liquidity mining’. Other variants of these claims are used as well.
The problem is that none of these investments exist as USDT cannot be mined. The scammers are exploiting people’s lack of knowledge about crypto and the desire to get rich quick.
What is Tether?
To understand why USDT mining investment platforms are scams, we need to first take a look at what Tether actually is.
Tether – or USDT – was released back in 2014 as a US Dollar-backed stablecoin which exists on the Bitcoin blockchain.
It’s designed to act as a bridge between cash and crypto and to allow effective and stable transactions in the world of decentralised finance and crypto.
Tether doesn’t suffer from the same price volatility as other cryptocurrencies as each token is backed by one US Dollar. The only price fluctuations relate to exchange rates.
However, it’s still decentralised and brings with it all the advantages this offers, for example cutting out the need for costly intermediaries when transacting with a third party.
Tether is also widely supported and there are many USDT trading pairs available on the large exchanges.
Investors often use Tether when there’s turmoil in the markets as it’s seen as a safe haven away from the huge price swings that can be experienced by other coins such as Bitcoin.
Is it possible to mine USDT (Tether)?
The short answer to this is ‘no’, Tether cannot be mined. The only way to acquire Tether is to buy it through a cryptocurrency exchange.
Because it’s possible to mine many other cryptos using a variety of methods, such as Proof of Work (PoW) or Proof of Stake (PoS), the scammers are preying on people’s lack of knowledge to offer a money-making scheme that simply can’t work.
New Tether tokens are only released when the equivalent value of fiat currency is deposited with the issuing company.
Tether (USDT) mining scams
Scams involving Tether mining often begin with the victim being approached by a stranger online, either through a social media platform or a dating website.
There are variants on how the scam plays out, but it’s often along the lines of a classic pig-butchering scam.
The victim’s new ‘friend’ quickly strikes up a relationship with them before turning the conversation to investing, namely in cryptocurrency.
Victims are told about a fantastic opportunity that will see huge profits in a short space of time, before being directed to a WhatsApp group where they see other ‘investors’ talking about how much money they’re making and what a great investment they’re involved in.
These people are either part of the scam or bots operated by the scammers.
Victims are also shown a so-called investment platform that they’re told they’ll use as part of the scheme.
But these are often poorly designed cookie cutter websites that only exist for a few months before closing down when they’ve served their purpose.
Related link: How to spot a scam website
Once they start ‘investing’, victims will be shown fake profits and encouraged to keep on ploughing money into the platform, but ultimately, they’ll be blocked from withdrawing their funds when they decide to do so.
The scammers will then try to extract more funds from the victim by claiming that if they pay a ‘tax’ or ‘commission’ they’ll get their money back, but this never happens, and any further funds sent are stolen.
If anyone approaches you online and encourages you to invest in a Tether mining scheme, or any other get rich quick crypto investment it’s best to ignore them.
Earning interest on Tether
What adds to the confusion is that it is possible to earn interest on Tether (and other stablecoins) that you’ve bought on a variety of platforms.
For example, popular lending and interest earning site Nexo offers returns of up to 12% if you buy and hold USDT on its platform.
There are many other exchanges, platforms and wallets that enable you to earn interest on USDT as well which makes it even harder for the average person to differentiate between what’s legit and what’s not.
So, while it is possible to make money with Tether by holding it in an interest paying account, this is completely different to mining.
Final word
With a scammer around every corner of the cryptoverse it’s vitally important that you educate yourself before parting with your cash.
It’s easy to get caught up in the excitement of this new digital frontier, but disregarding common sense and letting emotions get the better of you can be a road to ruin.
If you’re offered an opportunity that seems too good to be true, it probably is. You also need to ask yourself ‘why?’.
Why would a complete stranger tell you about it? Why wouldn’t they just take all the profit for themselves? Why have you been chosen to receive this so-called golden opportunity?
With any investment, it’s crucial that you understand the product you’re investing in before parting with your cash otherwise they’ll always be someone who’ll take advantage of you.
Education is key and there’s no shortage of guides, videos and forums online (including The Crypto Adviser) to teach you how to invest in crypto safely.
Crypto coaching and advice
If you suspect you’ve been scammed or are concerned that you’re about to be then we can help.
We can produce a report on a potentially scam crypto website/platform to see if it’s legit and safe to use or not.
We also offer consultations via phone/video call to discuss any crypto-related topics, during which we can guide you through the process of starting your investment journey.
For more details and to contact us, see our Advice Services page.
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