The crypto market is plagued by scams. You can find scams on all levels of the crypto market, from fake gurus to scam coins and even fraudulent brokers such as FTX. Crypto scams are fraudulent activities that aim to take advantage of investors by promising unrealistic returns or manipulating the market in some way. Here are some steps that investors can take to avoid crypto scams in general:
- Research the investment opportunity: Before investing in any crypto-related opportunity, it is important to research the company or individual offering the investment thoroughly. Look for red flags such as unrealistic promises or a lack of transparency.
- Check the regulatory environment: In many countries, crypto assets and initial coin offerings (ICOs) are not regulated in the same way as traditional securities. It is important to be aware of the regulatory environment in your country and to understand the risks associated with investing in unregulated assets.
- Be cautious of unsolicited offers: Be wary of unsolicited offers of investment opportunities, especially if they are accompanied by pressure to act quickly. Scammers may try to rush you into making a decision before you have had a chance to research the opportunity thoroughly.
- Don’t give out personal or financial information: Be cautious of providing personal or financial information to anyone you don’t know or trust, as this information could be used to defraud you.
- Don’t let pressure to act quickly influence your decision: Scammers may try to pressure you into making a decision quickly, but it is important to take the time to thoroughly research and consider any investment decision before committing any money.
- Dont listen to self-proclaimed crypto professionals: Never trust anyone in the crypto industry without doing your own due diligence. A lot of experts are paid to promote scam projects.
Overall, the best way to avoid crypto scams is to be cautious and do your due diligence. Take the time to research investment opportunities and be wary of unrealistic promises or pressure to act quickly. By following these steps, investors can protect themselves from scams and make informed investment decisions.
How to avoid getting scammed by the next FTX
FTX showed how dangerous it can be to invest in crypto. One of the world’s largest exchanges turned out to be a scam that stole billion of deposited trader funds. Below we are going to look at how to avoid getting caught in similar scams in the future. The sad truth is that most crypto exchanges are unregulated, and no one really knows how their finances really look.
The best way to avoid losing your funds is to keep your crypto in your own storage and avoid using centralized exchanges.
Another option is to avoid crypto exchanges completely and instead invest in crypto-based securities on well-established trading platforms that have a long history and strong regulations. There are a lot of well-established forex trading platforms, such as IC markets, AvaTrade and Pepperstone, that allow you to trade crypto-backed securities. Platforms such as these are much safer to use than newly established centralized crypto exchanges.
How to choose a good trading platform
Choosing a trading platform can be a daunting task, as there are many factors to consider. Here are some things to consider when choosing a trading platform:
- Regulation: Make sure the broker is regulated by a reputable regulatory agency, such as the Financial Conduct Authority (FCA) in the UK or the National Futures Association (NFA) in the US. This will ensure that the broker follows certain rules and standards and that your funds are held in a secure manner.
- Trading costs: Compare the trading costs, including spreads and commissions, at different brokers to ensure you are getting a good deal.
- Trading platform: Consider the trading platform the broker offers, including its features and user-friendliness. You will be using this platform to execute trades, so it’s important that it meets your needs.
- Leverage: Be aware of the leverage offered by the broker. Higher leverage can be tempting, as it allows you to trade larger positions with a smaller investment. However, it also increases your risk of losses, so use caution when choosing a broker with high leverage.
- Customer support: Consider the quality and availability of the broker’s customer support. You will likely have questions or need assistance at some point, so it’s important that the broker has a responsive and helpful support team.
- Reputation: Do some research and read online reviews to get a sense of the broker’s reputation in the industry. Look for brokers with a good track record and a history of satisfied customers.
Considering these factors, you can make an informed decision when choosing a trading platform.