Cryptocurrency is an advanced way to handle currency and transactions in a purely online form. Given the interest high-profile individuals such as Elon Musk have taken in cryptocurrencies, with Tesla’s $1.5 billion purchase of bitcoin, gaming the value of cryptocurrencies seems like a profitable trading strategy. Cryptocurrency brokers can point the way to making money on various kinds of digital currency.
Unfortunately, unscrupulous parties and scam brokers have sought to profit from the enthusiasm for bitcoin and the thousands of other cryptocurrencies on the market. At Crypto-Trace, we have compiled this list of brokers whose practices have attracted our attention. We strive to keep consumers aware of potentially problematic bitcoin scam brokers so they can be avoided.
Cryptocurrency brokers are a mixed bag. Some are regulated, honest, and can provide a significant return for your investments. However, bitcoin scam brokers can take your money and even your personal information and engage in criminal activity. The problem of dishonest cryptocurrency brokers is rising, and there are a plethora of scams appearing on social media and in online advertising.
It is important to stay aware, to know what to look for in a crypto scam, and to file crypto complaints if you feel you are a victim of fraud. Crypto-Trace experts will consult with you and will draft a crypto-intelligence report to help authorities track down the fraudulent brokers. Here are some things to look for when working with a bitcoin broker.
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The top of the list is a license. Cryptocurrency brokers who are not regulated are not worth working with. Even brokers who have a sub-standard license at least make the effort to be regulated to some extent. However, if you run across a cryptocurrency broker with no license at all, it is safe to say that the broker may want to get away with things he or she might not otherwise do with more oversight.
2. High Spreads and Fees
Look at the spreads and the fees. A scrupulous broker should list all of these clearly on the site. If you have to hunt for them, be careful. In some cases, you may not find the fees until you sign. Legitimate brokers have modest and reasonable fees and spreads. Do some research to determine what are decent rates in the industry for cryptocurrency brokers.
If fees are a bit higher than average, that may not necessarily signal a bitcoin scam broker, but you may want to look around. You may find that a broker charges for deposits and withdrawals. Most regulated brokers do not charge these fees or if they do, they are a modest amount. It is common for a Forex crypto scam broker to not inform you of fees until you ask to execute a trade or withdraw money. This often a sign of a scam broker.
3. Poor Communication
Crypto scam brokers are generous with the promises of easy and huge returns but when it comes to discussing their trading philosophy, they can be pretty quiet. Beware of evasiveness to questions about trading approach or why certain things are better trades than others. A good broker should be enthusiastic about his or her work and want to share insights, whereas bitcoin scam brokers may avoid the topic.
4. Does Not Release Funds
The point at which many of the people we talk to finally realize that they are the target of bitcoin scams is when they are not allowed to withdraw their money from the brokers. Many of these brokers will not admit outright that they will not release funds, but will tell them there is a delay, that there needs to be an account minimum (that wasn’t discussed before) or that there is a fee so high that it may not be worth it. That is where you will need the assistance of a company like Crypto-Trace, because it is a fair chance they are getting ready to make off with your funds.
1. Research Brokers Thoroughly
Before signing up and opening an account, research all cryptocurrency brokers thoroughly. Find out whether they are regulated, by which agency, what are their fees and spreads and read some reviews to get a general idea of whether they are considered reputable or not. It is always worth it to work with the highest quality broker you can. If you sign up with a top-tier broker, you may not get the hyped-up false promises, but you are much less likely to be the target of a crypto scam.
2. Document All Interactions
Keep a record of all interactions and paperwork between you and the broker. This means contracts, emails, and texts. If you can also record phone conversations, that may help.
3. Insist on Information
Be assertive and demand that a cryptocurrency broker answer your questions. If they seem intimidated and flummoxed or simply won’t get back to you, that may be a sign of a bitcoin scam. Keep in mind that fraudulent brokers are expecting their prospective clients to be naive. Do some research ahead of time and know what questions to ask before you sign anything. A sudden evasiveness can also tip you off to a potential scam and stop fraudsters in their tracks.
Crypto-Trace experts make it our business to research scam crypto brokers, discover their methods, and track them down when necessary. We have compiled this list of brokers and have investigated their practices. If you have lost money to these or any other cryptocurrency brokers, schedule a consultation with our experts today.
We discuss the details with you and assist you in creating a detailed bitcoin scam complaint. We do full research and draft a crypto intelligence report that you can present to authorities to find the fraudulent broker, help stop them in your tracks and improve the chances of getting a full refund.