How to Spot a Fake Cryptocurrency Exchange or Trading Platform

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Scammers will stop at nothing to try to relieve you of your cash and crypto, including setting up fake exchanges.

Sometimes it’s difficult to tell what’s a real trading platform and what’s a scam site set up to steal your hard-earned cash, especially if you’re new to crypto.

Here, I’ll give you a few pointers on how to spot a fake Bitcoin exchange and avoid becoming a victim of a crypto con, such as the pig butchering scam.

Bear in mind there will always be a more sophisticated con just around the corner, so do your own due diligence before signing up to anything.

It’s vitally important that you research an exchange thoroughly before parting with your cash. Search online for reviews and look a forums for opinions from other users. Type the name of the exchange and ‘scam’ or ‘legit’ into Google to see if anyone has had a bad experience of the platform you’re considering.

Things to look out for when signing up to a cryptocurrency exchange

All of the reputable exchanges have extensive reviews and comments online, and an active social media presence. This alone should give you a good idea if an exchange is legit or not.

The cryptocurrency community is extremely active and if an exchange is a scam, the chances are someone’s already written about it.

Reputable companies will have an extensive online footprint, which will often include a Wikipedia page. If you can’t find much info about a platform, the chances are it’s fake.

Safety checklist:

• A huge red flag is the promise of unrealistic returns. If an exchange is claiming that you can see a vast profit in a matter of days or weeks, or double your money over a short period of time, it’s almost certainly a scam. Remember, if it sounds too good to be true, it probably is.
• Does the site promise that you’ll get a return on your cash without risk? All investments carry some risk, whether in the crypto sphere or elsewhere, and returns can never be guaranteed.
• Have a good look around the website. Is the translation poor? Are the details of the services offered generic and vague sounding? Do the alleged staff photos look fake or like models? What licenses to they have? Is the company address a real office or simply a PO Box somewhere? Is there a well-written whitepaper? These are just some of the tell-tale signs that a business is fake.
• Is the information on the website spelled correctly? Often scam websites are poorly written.
• Visually, how does the exchange look? Even the more sophisticated fake sites often look different and less professional than legitimate platforms. They often lack features and detail, and are clearly ‘cookie cutter’ templates.
• Check their social media channels linked from the website. Often this links will simply redirect you to an internal page.
• Visit a domain name lookup site such as who.is to see who owns or runs the site. If the information has been redacted it could point to suspicious activity.
• If you’ve had the misfortune to deposit cash through a scam exchange and appear to have made a profit on the crypto you’ve bought yet are being told you need to pay a large transfer fee to retrieve your funds, this points to a rip-off.
• Look out for other unexpected fees, even for simply singing up. The legitimate cryptocurrency exchanges do not charge anything for creating an account.
• After signing up, does the exchange flood your inbox with tempting reasons to place more cash on the exchange, or warn you that you need to top up or lose certain privileges? Alarm bells should ring if this happens.
• Some fake exchanges are set up under a name designed to sounds similar to that of a legitimate exchange, ie Conibase instead of the legitimate Coinbase, so always check the URL you’re using.
• If you’re using an exchange on your mobile device, only download apps from the Google Play Store, Apple App Store or similar.

What can I do to spot a scam cryptocurrency exchange?

One way of the easiest ways of staying safe when choosing a cryptocurrency exchange is to stick with the big, well-known companies, such as Coinbase or Binance.

They’re easy to research and you’ll have the peace of mind that you’re not about to have your funds stolen.

Make sure you always check the URL of the official exchange when you sign up and each time you login to make sure it’s correct.

Also, never respond to an exciting sounding financial offer made via email or during a cold call as this is highly likely to be part of a targeted scam to get you to sign up to a fake exchange.

What should I do if I fall victim to a crypto scam?

It can be incredible upsetting when you realise you’ve been scammed and lost money.

You may also feel embarrassed as well, and you may be reluctant to tell your loved ones and friends what’s happened.

However, it crucial that you act quickly to prevent further loss of funds. So follow these steps:

• Do not send any more money to the scammers, even if they claim this is the only way you can get your investment back.
• If you’ve signed up to any form of direct debit cancel it immediately.
• If you’ve given the fake exchange your debit or credit card details tell your bank immediately. Often this information is shared among scammers.
• It’s important that you talk to someone and seek help if needs be, especially if the scam has put you in a position of financial difficulty.
• If you’re feeling like you might want to harm yourself as a result of the loss, call a support line. In the UK, the Samaritans can help 24/7 by calling 116 123 free.

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