The whole concept of Cryptocurrency is floating in a bubble. Though there is a lot of uncertainty, you can play your part in making as much success as you can. Spotting a scam and staying safe is the first thing that you should do. And in order to avoid scams, you need to understand how to spot a Crypto scam.
Here are some most common Cryptocurrency scams that you need to avoid.
The fundraising techniques for the cryptocurrencies that have been newly launched are called ICOs. In the new venture, tokens are sent to the traders in ICOs. There are many ICOs that have launched with problems.
- Though there are many ICOs that are totally legitimate. But in most cases, major ICOs have no proper technology or business plan behind them.
- Some ICOs are also there who launch with a white paper that is written by people without any industry experience or technology.
- Often, new altcoins make unconfirmed claims about their own products.
Get for pieces of information about ICOs by Visit here for more.
Regulating agencies, law enforcement, and the government have already started cracking down on ICO fraud.
- The SEC or the United States Securities and Exchange Commission has filed charges for fraudulent activities against ICOs. Only those who have made the sale, based on fraudulent claims.
- The sale of ICOs has been banned in China.
- Many individuals who have experienced fraud have stated that ICOs as the biggest scam ever.
The extraordinary volatile nature of Bitcoins has spawned an entire industry of automated trading systems. The promoters, who promote these products, make a promise to the traders of a way of beating the market, and ask for arbitraging prices between different exchanges.
Exchanges for Bitcoins have an expensive process of withdrawal along with hefty conversion fees. Conversion fees are those that exchange charges for converting Bitcoins into fiat cash, like United States dollars or Euros. Also, the whole process of bitcoin trade settlement may take hours.
If not hundreds, thousands of unregulated brokerage firms and online exchanges are there. They provide, Cryptocurrencies along with other Cryptocurrency products. So, the traders have to be cautious.
It will be best if they avoid too-good-to-be-true promotions and never fall for those promises. In most cases, after the deposition of money, the firms will charge an outrageous commission. They also make it hard to withdraw funds. In the worst cases, they can also steal your money.
In order to stay safe from the Bitcoin fraudulent activities and keep your funds safe, you need to make sure you are following the below-mentioned things.
- Investing in stocks and bonds is totally different from putting your money in bitcoins or Cryptocurrencies. The Cryptocurrency market is much more volatile in nature than the stock market.
- It is possible that a Cryptocoin that is too popular today will lose its price value by tomorrow end of the day. So, make sure to invest only the amount that you afford to lose.
- Research is another key to avoid fraud and losing money. Go through the review of exchanges and brokers before opting for one.
- Stay updated with the latest Crypto news and all the rise and fall of the Crypto market. And try to find reliable and authentic information.
- Choosing the right trading instrument is another thing you need to consider. While selecting a Cryptocurrency exchange, Altcoins, and other crypto products, be a little more attentive and demanding.
- Always choose a regulated CFD broker. You should do your homework before you deposit your money. In case you are new to this Crypto space, do not hesitate to ask an expert, but take your own decision.
So, now you have an idea about the frauds that you may encounter while trading with Bitcoins. Make sure to be more attentive and careful while trading your hard-earned money. Keep in mind all the points that are mentioned here and have a safe Crypto experience.