Currently, money plays a quite important role, and people are wondering how they can earn additional income. The answer to this query is often investing in cryptocurrencies. Unfortunately, false cryptocurrency exchanges are gaining momentum every day.
To understand which organizations can be invested in and which are better to avoid, we suggest familiarizing yourself with information about fake exchanges and ways to protect yourself from them.
Enticing offers – a clear sign of deception
In critical situations when money is short, users may lose vigilance and fall into exchange fraud schemes. One of the most striking examples of such scams are:
- bonus rewards;
- welcome promotions;
- prizes;
- draws;
- earning without investment.
Such offers may seem very attractive at first glance, but often behind them are scammers looking to get all the money and disappear.
Before starting cooperation, you should carefully study the information regarding cryptocurrency exchanges. Fraudsters promise to double the client's deposit, but as soon as he replenishes the balance, all funds disappear, and the account remains blocked. The terms of such offers are often very ambiguous or lead to a complete loss of money.
If the client has already become a participant in such a project and their trades have generated some profit, this does not mean they will receive it. Specifically, dishonest companies, when withdrawing funds, require an additional commission to be paid for the withdrawal. Since the client will be reluctant to lose the earned money, they will pay it. After this, all their profit simply disappears.
Signs of scam exchanges also include cloud mining. Here users are attracted by savings on equipment purchases. The organization, in turn, receives income from renting capacities and a percentage of traders' profits. However, the risk is that the companies do not provide equipment of proper quality, or may simply disappear as soon as the client pays for the rent.
Cloning well-known crypto exchanges
Fraudsters are ready to do anything for profit, so one of the easiest ways to scam people is simply copying well-known companies, where even the domain is almost identical. The main task of fraudsters is to gain the trust of clients and persuade them to invest as much money as possible. A crucial role here is played by specialists from the technical service, who possess powerful psychological tools for morally pressuring traders.
Meanwhile, scammers are ready to simulate trading operations and their positive outcomes. In this way, users are convinced of profitability and wish to invest even more money. Such organizations may allow traders to withdraw profit once, but later this operation will be impossible to accomplish.
False trading platforms
The main sign that a crypto exchange can be considered a scam project is problems with legal documentation or its complete absence. A reliable organization must have a certificate of incorporation, licenses from financial regulators, and internal documentation.
Nonetheless, even the presence of these documents does not guarantee the honesty of the company, and they may simply turn out to be fake. More and more often, such firms are registered in offshore zones. Therefore, it is necessary to carefully review scanned copies of licenses from supervisory authorities and ensure their legitimacy. Also, before investing money in such projects, we recommend studying reviews about them to avoid becoming a victim of a fake cryptocurrency exchange.
The organization's website should specify ways to communicate with the technical support service: phone number, email address, online form for sending messages, and the address of the main branch. If this information is not published, it is a clear sign of fraudsters.
How to recognize a fake exchange
Summarizing the information above, it should be noted that under the guise of honest cryptocurrency exchanges, real scammers are often hiding. Here are several key points indicating deception:
- Lack of a certificate of incorporation;
- Fake scanned copies of licenses from financial regulators;
- Company anonymity;
- Cloning of websites;
- Attracting clients with "profitable" promotions;
- Requiring payment of related expenses.
It should also be noted that scammers' schemes can change, and there are more scam projects every day. Therefore, before investing in cryptocurrency exchanges, it is important not to lose vigilance. It is necessary to thoroughly study the documentation and terms of cooperation.