Identifying Fake Cryptocurrency Exchanges

The rise of digital currencies also opened a lot of doors in the business world. Along with cryptos peak is the sudden hike for Cryptocurrencies exchange platform as well. Exchanges for virtual currencies provide a crucial venue for listing digital assets. However, numerous of these exchanges are still unlicensed and prone to fraud. In order to trick potential investors and swindle them of their money, scammers have in fact turned to building fictitious cryptocurrency exchanges and exploiting transaction volumes on exchanges that appear to be trustworthy.

These platforms could threaten investors, block cryptocurrency withdrawals, impose hefty fees, or even disappear with your money. Before creating an account, you should get familiar with the warning characteristics such bogus websites/apps.

Since a new type of fraud has risen as a result of the global popularity of cryptocurrencies and the surge of crypto billionaires clogging feeds on social media, bogus cryptocurrency exchanges draw potential buyers intending to benefit from their profits.

WikiBit shares red flags to know if an exchange platform is fake:

It's probably a scam if an exchange guarantees a rate of return on capital that sounds too good to be true. Sure to keep in mind that offers are a huge clue of a phony exchange, primarily those which claim subsequently led in the first few days or even weeks after enlisting. Also, Frequent messages that appear to be spam—-mainly those that request frequent fund recharges, may be an obvious sign that the company is intending to collect funds that will be used illegally. Additionally, platforms that charge unexpectedly high withdrawal or registration costs that haven't been explicitly stated ought to be avoided.

Fraudsters are still adopting some tested scam techniques, but now they want to be paid in cryptocurrencies. Among the most common methods—swindlers need you to buy bitcoins and deliver it to them is through investment scams. Nonetheless, scammers also use other strategies, such as posing as companies, authorities, or a romantic interest.

An example is a fraud case of South Korea:

Authorities busted one of the most prominent fraudulent bitcoin exchanges in 2017. In an effort to swiftly establish validity, BitKRX was called to mimic the cryptocurrency division of Korea Exchange (KRX), the leading and legally existing currency trading platform in South Korea. Furthermore, cryptocurrency marketplace in South Korea, Coinbit, was eventually taken over by authorities when it was uncovered that 99% of its transaction activity was fabricated, according to reports.

Download or Visit WikiBit to get the latest news from the Crypto Market!

Good thing, a platform such as WikiBit helps potential investors identify which exchange platform is authorized or not. It facilitates clarifications about the validity, legality, and detail of digital brokerage firms. Visitors to WikiBit can access a range of services, including data queries for blockchain trading systems, regulatory questions, licensing queries, and overall risk of a particular cryptocurrency exchange platform.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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