The huge growth of Cryptocurrencies has created more opportunities for scammers to scam.
These scammers steal people’s money using fake crypto exchanges and wallets.
Before you use any cryptocurrency exchange, there are things you should look out for to determine whether it’s fake or authentic.
Keep reading to find out.
Post Summary
- What Are Fake Crypto Exchanges?
- How To Spot Fake Crypto Exchanges And Wallet
- How To Protect Yourself From Crypto Scammers
- Conclusion
Let’s proceed!
1. What Are Fake Crypto Exchanges?
Crypto exchanges are platforms for buying and selling digital assets.
Though we have really legitimate ones, many of these crypto exchanges are still illegal and open to fraud.
Scammers have turned to creating fake crypto exchanges and luring people to use them.
One thing with these fake crypto exchanges is that they look real.
Potential victims are duped by these fake, unregulated crypto exchanges that pass for real ones.
Some of these fake exchanges even go to the extent of using fake celebrity endorsements or promises of amazing ROI to entice their potential victims.
If an investment is eventually made, the scammers then step up the game.
In some cases, the potential victims receive fake trading information from the exchange.
Other times, the potential victims may need to pay high upfront costs to the site admins before withdrawals are allowed.
In the end, the scammers run with your money, and off the radar, they go.
Quite a sad situation!
Using trustworthy exchanges and wallets is advisable so you won’t fall into the hands of scammers and be a victim of fraud.
So how can you spot a fake crypto exchange or wallet?
I listed that below.
2. How To Spot Fake Crypto Exchanges And Wallets
It is advisable as a crypto trader for you to use well-known and reliable exchanges.
Before opening an account, do your own research.
Find out if other people or recognized consultants in the crypto world can confirm the validity of that exchange and wallet.
These are some of the red flags of a fake crypto exchange and wallet;
i. High Return Rate
It is most likely a scam if an exchange guarantees a rate of return on an investment that looks too good to be real.
This is one of the ways to spot a fake exchange, especially those that will promise high returns within the first few weeks or days after your registration.
In the crypto space: if it’s too good to be true, then it is too good to be true indeed! No cap…
So, if a rate of return on investment appears to be too good to be real, it almost certainly is.
ii. Spammy Contacts
Any crypto exchange that spams you with an unnecessary contact is most likely fake.
These contacts could be in form of emails and texts and not just phone calls.
Excessive contacts from the platform that appears to be spam could indicate that the exchange is attempting to gather funds that will be misused.
iii. Inability to Process Withdrawals
In a simple case of theft, the site may let you make withdrawals with a little sum of money.
When your investment looks like it is going well, that would tempt you or make you put in more money.
As time goes by, when you try to make a withdrawal, the site either closes down or refuses your request.
iv. Unknown Owner
Be cautious if you can’t figure out who’s behind a crypto trading platform.
It should be very straightforward to determine who the main owners are.
This usually includes easily accessible biographies of investment managers as well as a social media presence.
v. Free coins
Scammers offer free coins as one of the methods of luring people.
On a social media platform called Discord, a scam was carried out;
The scammer offered free coins and then gathered personal information, under the disguise of “Know Your Customer”.
Then, the scammer or probably scammers made their victims make a deposit.
When these victims try to withdraw, that’s when they realized they had been scammed.
This doesn’t mean there are no legitimate bonuses from real crypto exchanges.
Various exchanges have legitimate customer bonuses as part of their operations.
So if you see any offer, make sure to confirm that the platform is real and the website that you are using is indeed owned by that platform.
These are the ways to spot a fake crypto exchange.
It is said that a problem known is half solved, right?
Now that you know how these exchanges operate, let’s see how you can protect yourself from these scammers.
3. How To Protect Yourself From Crypto Scammers
a. Watch your app
Be sure to download your apps from the right source.
Send a little amount of money the first time you transfer money to check the authenticity of the app.
Also, when updating your apps, stop the update if you see any suspicious activity and delete the app.
b. Don’t rush
These scammers love to pressure you to invest your money right away by making bonuses or as I stated earlier “offering free coins” to make you invest immediately.
Before rushing and probably ending up falling for a scam, take your time and do your research to find out if it’s legit.
c. Ignore fishy calls
It’s most definitely a scam if someone calls you unexpectedly and starts telling you about a crypto investment opportunity.
Never give anyone who contacts you in this manner your money or personal information.
d. Protect your apps
Secure your sign-in passwords for exchanges and be sure to activate 2FA for all your accounts.
For your various wallets, hold their private keys close to your heart.
e. Do your homework
The most important thing to do to protect yourself from crypto scammers is to do your homework.
Not all crypto exchanges or cryptocurrencies are scams.
However, do some research before using a crypto exchange or before investing in a cryptocurrency you have not heard of before.
Be sure to know who runs it, and look for real reviews on platforms such as TrustPilot, Scam Adviser, etc. or check out our ‘Scam Unmask‘ category.
You can also use the ways stated above how to spot a fake crypto exchange.
Join me in the next section to conclude this post.
Conclusion
And this brings us to the end of the post.
I hope this post was helpful and it will not only help you spot fake crypto exchanges and wallets but also protect you from crypto scammers.
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