The selection of a cryptocurrency exchange most often determines whether trading for beginners is a delight or a headache. Nevertheless, there is a minor possibility that you may encounter a shady cryptocurrency exchange, given the abundance of options (because thousands of them are available).


How can you distinguish the grain from the dirt, though? We’ve outlined the essential considerations to keep in mind to prevent you from depositing your money to an organization that will utilize it to get off with anything while also assisting you in separating the grain.


Here are a few typical bitcoin scams to be aware of.


1.  Investment Strategies For Bitcoin

In bitcoins investment scams, con artists approach investors under the guise of experienced “investment managers,” telling their prey that they’ve made a fortune investing in cryptocurrencies and those new investments would be profitable.


The con artists want payment up in advance to begin. The crooks then steal the lump sums rather than make money. To access someone’s cryptocurrency, the con artists may also ask for personal identity information under the pretense that they need it to move or deposit money.


The use of phony celebrity endorsements is a different kind of investment fraud. To make it seem like the star is endorsing a significant financial benefit from the investments, scammers use authentic images and superimpose them on false accounts, advertising, or publications. These assertions come from credible sources because they use well-known brands like ABC and CBS and have polished websites and logos. But the promotion is a fraud. Hence Compare crypto exchange sites and look out for them. If you are looking for a tool to help you with the comparison, ProCoinList will do a good job!

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2.  Delayed Customer Service

If this is your first time utilizing a crypto exchange, you will need some chance to learn how it operates. You might occasionally require further assistance or answers to a few of your queries. And given how volatile the cryptocurrency markets are, you’ll need the facts immediately! With fraudulent crypto exchanges, getting in touch with a customer service representative is difficult or results in a lengthy wait.


3.  An Unexpected Size, Location, Or Pattern Exists In A Transfer.

Any unexpected transaction could be a clue that money is being laundered. For example, a customer significantly senior to the everyday use of a site may be a cash mule who moves money for crooks when they execute an unexpectedly significant transfer to an unrelated address.


One warning sign is when users send cryptocurrencies to several addresses at once, especially if these accounts are all in high-risk regions or are unrelated to the users’ places of residence and employment.


4.  Identity Obscurity

Authorities from all around the world are very concerned about secrecy in the cryptocurrency community. Suspicious transactions connected to financial fraud are challenging to identify and keep track of without confirming who the end-user is hiding behind the account. This raises severe red flags whenever a user disregards the Know Your Customer standards.

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5.  Type of Transaction


The FATF asserts that there could be a significant chance of financial fraud should any of the below things happen:


  • a user who, to avoid being noticed, engages in several small-scale transactions
  • High-value bitcoin transactions that are completed quickly
  • Virtual currency exchanges that are regulated and those that aren’t
  • putting previously discovered stolen money in cryptocurrency wallets


6.  Unusual User Behavior

Naturally, suspicion is aroused when a user presents forged identity papers or an uncertain funding source. Parallel to this, someone who often modifies their private information, like their email id, Ip, or bank information, may be involved in financial fraud.


Other warning signs are if a user’s geolocation doesn’t fit their Ip, mobile number, or checking account or if IPs are hidden using VPNs.


Summing up

You must safeguard your e-wallets from attackers just as you would your traditional wallet. Put considerable sums of electronic currency in a secure or FDIC-insured deposit account to develop digital solid security practices similar to how you manage large amounts of physical money.


Additionally, once you think or have proof that dishonest people are at work, don’t neglect to alert the authorities about the scam so that other people can be saved.

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