The scam exchanges are a reality, unfortunately. In this article we explain how to recognize them and how to avoid them.

Cryptocurrency exchanges are a widespread reality. Indeed, they represent one of the very few solutions available to those who want to create a portfolio of virtual currencies, perhaps to be used (in the short, medium and long term) with targeted investment operations aimed at generating surplus. Unfortunately, the Exchange landscape is very complex, and moreover not very regulated.

The result is a certain abundance of "self-styled" Exchanges, which however prove to be scams. An expert eye is able to distinguish bad apples, but beginners, aspiring investors or simply those who have recently entered the crypto world may find the operation somewhat difficult.

This article tries to answer their needs. In fact, we will list the elements that signal (certainly indirectly) the presence of an Exchange scam.

WHAT ARE EXCHANGES AND WHAT RISK THEY ENTAIL

Before listing the elements that make an Exchange a real scam, and the related signs immediately visible, it is necessary to spend a few words on the concept of Exchange. A concept that may seem simple, indeed automatic understanding (the meaning lies in the name) but which actually conceals dynamics that are not at all obvious. We will talk about the risk inherent in the Exchange, or the result of a structural dynamic which, at least for now, cannot be canceled, but which can put cryptocurrency investors in trouble.

A DEFINITION OF EXCHANGE

An Exchange is exactly what the name suggests, that is, a platform where you can exchange cryptocurrencies. It is possible to place purchase or sale orders, deposit cryptocurrency or withdraw it. They generally offer a wide range of virtual currencies from which to choose, although the offer is often limited to a few dozen. It may seem like a lot, but it only represents a small part of the entire cryptocurrency landscape. Generally, it is possible to exchange cryptocurrencies only with other cryptocurrencies, therefore deposits or orders made in dollars, euros, pounds, yen etc. are not allowed. This means that even before you start, you need to have virtual currencies. Other exchanges, a little more official, instead allow you to "buy" cryptocurrencies simply by paying them, therefore starting from normal currencies. In general, these platforms act as a preliminary step to a more complex investment activity, among other things, they have an often narrow offer.

THE STRUCTURAL PROBLEM OF THE EXCHANGE

So far, everything seems to be going smoothly: Exchanges are useful platforms that allow you to invest, deposit or create a cryptocurrency wallet. Yet in any case they expose themselves to a very serious risk, which is also inevitable. In fact, the Exchange world is permeable to scams. And the reason is simple, however disheartening: there is no regulation. If brokers can and should be regulated, the same cannot be said of exchanges. Now this is the ideal context for a "rotten apple" that wants to sneak into the basket. In fact, the incidence of scams is not very low. On the other hand, the absence of a license does not raise suspicions precisely because ... There is no license for Exchange! What can the user do to defend himself? You simply have to go to the bottom, know the criteria that, if any, identify the platform as a scam and always put them into practice.

HOW TO RECOGNIZE EXCHANGE SCAMS 

Knowing how to recognize dishonest exchanges, or even false platforms that only pretend to offer services and then disappear into thin air is fundamental. Indeed, it is one of the skills that an aspiring cryptocurrency investor must possess if he wants to survive and thrive in such a complex market. Below we list the features that, if present, identify an Exchange as a scam, or that at least should cause the user a strong skepticism.

ORIGIN NOT CLEAR

Of course, there are no licenses for the Exchange, regulation is a very relative concept. However, this does not mean that these platforms, in practice, must provide the same "informative" guarantees as trading platforms of any other type. These guarantees generally include clear and explicit references to the operational headquarters and to the company or team that developed the Exchange. These are fundamental elements in that the office offers a point of reference in case of problems of any kind, and especially legal ones, while the information on the development team offers a kind of reference, or at least helps to give an idea of ​​the quality of the project. So if an Exchange does not offer this information, and does not do it directly on the showcase site, then there is something wrong. You'd better run away.

THE QUALITY AND QUANTITY OF FEEDBACK

Feedback is also an important aspect. In truth, they represent a fundamental understanding tool in the evaluation process of any product or service of which there is a marginal awareness. On the other hand, who better than customers and former customers can offer realistic information on any product or service. Obviously, exchanges are no exception. So, judge an Exchange from the online feedback. However, learn to recognize fake ones, designed by those who promote the Exchange to deceive, or for simple marketing purposes. It is generally not complicated. For example, feedback is probably false if it does not go into detail, it abounds with generic but exaggerated adjectives, it is too ... Positive. If possible, even contact those who released the feedback to find out more.

LITTLE CLARITY ON ECONOMIC CONDITIONS

This is probably the most important step. On the other hand, those who sign up for an Exchange do so in the hope of getting rich, right? So, carefully study the economic conditions, which include commissions on orders, those on withdrawals, deposits etc. However, there is certain economic information that can help you understand if the Exchange you are facing is a scam or not.

This information concerns the action of the withdrawal. Well, if an Exchange does not provide precise information on the withdrawal conditions, and in particular on the transaction times from one wallet to another, if it does not mention the fees on the withdrawals themselves, then that Exchange has something to hide. Therefore, it is better to turn away. In parentheses, this information should be present not only in the terms of use, but also in the site itself. Many scam platforms, in fact, aim to make withdrawal impossible or in any case extremely difficult. In short, you completely lose control of your assets.