Cryptocurrency is the hottest word and one of the most searched terms on Google these days. There are so many benefits brought about by the emergence of the digital coins and the blockchain technology and that is why everyone wants a share of the pie. To cash in on the general demand for and obsession with the digital currencies, many cryptocurrency exchanges began to spring up.
Emergence of crypto currency exchanges is actually not a problem. In fact, it makes the industry even more lucrative. However, the problem is the proliferation of scam cryptocurrency exchanges. They started gradually and they have reached a very worrisome number and the trend may not change soon.
You need to arm yourself against fraudulent crypto exchanges
While you may not be able to do anything about the anomalous development of scam cryptocurrency exchanges that are already setting the industry back, you can arm yourself with tips on how to identify fraudulent crypto exchanges and stay safe.
The scam cryptocurrency exchanges adopt different tactics to deceive unsuspecting investors and traders and their strategies evolve. So, it is not enough to arm yourself with the tips on how to identify fraudulent crypto exchanges below, you also need to keep updating your knowledge on how they operate. Without further ado, here are some of the ways to identify scam crypto exchanges and how to avoid them.
Tips on how to identify and avoid scam cryptocurrency exchanges
Google the exchange + the word “scam”
For instance if the name of your potential exchange is xbat, you can Google “Xbat + scam”. This will bring pages where the site or exchange is linked to one scam or the other. Check out several links on search engine result pages. For a fraudulent exchange, you will likely see numerous complaints. That should be a warning sign.
Look out for site impersonation
Some exchanges impersonate other reputable exchanges in such a way that non-vigilant visitors won’t notice the difference. Take patra.com as a reputable crypto exchange site. Scammers may impersonate it as pa_tra.com, pa.tra.com, pattra.com, or petra.com. So, you need to watch out for any of these.
Hidden Headquarters, CEO, and Employees
While reputable exchanges will easily give information about the locations of their offices including their headquarters, fraudsters will never include the information on their website or they may give fictitious ones. In addition, reputable sites also give brief information about their CEOs and some of their top employees which usually include their pictures. Scam sites won’t give any of that since no one wants to be linked to scam. In other words, ensure you find out the necessary details about the team behind an exchange before patronizing them.
Lack of communication channels
Reputable companies are always eager to interact with their existing and potential customers so they leave their communication channels on their website and these include phone number, email address, and possibly, links to their social media accounts. Fraudulent sites hide these information or give fake ones.
Some exchanges actually started well but could not surmount certain challenges and so they collapsed with investors’ money gone down the drain. This is why you should go for an exchange that has been in business for years.
Since scammers will continue to come up with new strategies, the best way to stay safe is to always do a due diligence on any exchange before committing your money. Call them or send an email to them to see how quickly they will respond. Try to verify the address and phone numbers stated on their website to be sure they are real.