Cryptocurrency seems to be the hot financial topic of 2021. We’ve all seen how well these digital coins performed over the past year, especially with other markets entering a slowdown in the face of the pandemic. True, the most prominent names in the list of cryptocurrencies are taking a plunge in the past few weeks, but this can be attributed to their general volatility. All in all, analysts don’t seem to be concerned about these fluctuations.
However, the real risk of cryptocurrency trade does not necessarily stem from their ‘topsy turviness’. There are other, hidden risks worth mentioning, which are a result of this market being a playground for scammers and thieves. Let’s try to dive into this issue, and see why the crooks are focusing on the crypto market recently – and what you as a crypto trader can do to stay safe.
The biggest advantage of cryptocurrencies, as a payment unit, is their disconnection from any central bank. In essence, this means that a country’s situation will not affect the digital token’s rate since it is no way connected to any fiat currency. Aside from that, the process of buying, selling and exchanging cryptocurrencies becomes much simpler – and cheaper – when banks are not involved. All you need is your digital wallet and an exchange platform.
Nevertheless, there is a flipside to this (virtual) coin, as these advantages can also become disadvantages. Being disconnected from any central financial institution means that there is no real supervision regarding what goes on in this broad, vague market. There’s a reason why hackers usually demand ransom in the form of cryptocurrency. When you can’t trace where it goes, it’s much easier to commit felonies with it.
And that’s not all. It doesn’t end with lack of supervision, the problem is much deeper than that. There’s a general lack of regulation and enforcement regarding how crypto is bought, sold, and generally moved around, and that’s exactly where shady online crypto trading venues enter the picture.
Authorities have found clever ways to set rules and enforce them in the online trading sector, when it comes to actual money. But these digital tokens don’t physically exist, so the financial decision makers are still scratching their heads and trying to figure out what is going on, while the crooks have already come out to play. Not all of the people in this industry are bad people and that must be said, but you can see why this open door invites the dishonest ones to enter through it.
Bit by bit
The fact that Bitcoin and Ether, today’s leading cryptocurrencies, have made a name for themselves in the past few months, just makes matters even more risky. With everyone talking about these cryptocurrencies, a whole lot of inexperienced investors feel the need to join in on the fun, but not the need to do a bit of homework beforehand. The result? The market is flooded with beginner traders, an easy prey for online Bitcoin trading scams.
It is important to know what form these scams take, so you can try to avoid them. It usually starts with an online crypto trading website, offering fast and reliable trading services on many different cryptocurrencies. If you search these sites for a license to operate from some international financial body, you probably won’t find it.
The registration process is very easy and takes a few minutes. Depositing money in your account can also be done almost without effort. You may even be assigned a personal broker, who will help you get started and give you advice regarding promising cryptocurrencies. As you can see, as long as you are giving these agencies money, everything seems to be OK.
The problems start when you want to withdraw your money. They might ask you for different forms or documents. They might surprise you with hidden fees or commissions. They might even disregard your requests and stop answering your calls and emails. You’ll have nobody to complain to because, that’s right, nobody is regulating and supervising them.
See the signs
Naturally, the best advice we can give you is just to stay away from dubious trading sites. Usually these websites look unprofessional, with grammatical errors and broken links, and that’s a first sign to run away. Also, if not enough explanation is clearly provided, this is not where you should be depositing any money – whether fiat or digital.
Always do a background check before you deposit any money. If the website doesn’t boast a license, it is probably because there isn’t one and that’s a clear sign of danger. You can also Google the company’s name, and read some reviews from previous and existing clients, but keep in mind that some of these reviews are phony and generated by the trading website itself.
Even if you have already made the mistake of trusting the untrustworthy, it is not too late for you. There are ways to get back money which has dishonestly been taken from you online, but we’ll get to that. The first thing you must do is call your bank and try to cancel any payments you’ve made or are scheduled to be made to the trading brand. It would also be wise to cancel the credit card you used when enrolling.
The next step is to take action against the culprit. We at The Global Payback specialize in that, with 15 recovery experts handling cases from around the world. Using AI, we know how to track down the people behind these bogus websites, even after they’ve seemingly disappeared off the grid. We also have a legal team on hand, ready to act if the crooks refuse to pay (and, based on our experience, they usually do).
Make sure you keep any contract or document you’ve received from the broker in the past, as it may be useful for the legal part of the process. Also, it would be kind of you to share your experience with others, especially online. It may not help you get your money back, but it will save someone else from going through this hassle.