Beware of scammers: How not to fall into the trap of dishonest exchanges?

Thanks to the promises of profitability associated with trading, more and more people are being lured to decentralised exchange platforms. Unfortunately, trading scams are on the rise. There are now exchanges created out of thin air to scam naive users out of their funds. If you want to invest your savings safely, read on for methods on how to avoid the pitfalls of dishonest exchanges.

How do dishonest exchanges work?

A scammer or scammers pose as trustworthy exchanges, offering tempting offers in the hope of catching people looking for financial investment solutions. More often than not, they place their adverts on social media to reach as many people as possible. Sometimes they enlist the help of highly paid influencers. These influencers then use their influence over the audience to influence their choices and promote the services of these fraudulent exchanges.

As a rule, such adverts contain links to exchange platforms similar to the popular ones. The goal of the scammers is to get you to invest your money in fake exchanges, making you believe that you are on a trustworthy site. On some of these exchanges you will even find proof or certificates of affiliation with official organisations. No matter how real these proofs seem, they always turn out to be false.

Identity and investment theft

The first trap that scammers can set is to get you to give them your personal details such as your email address, password and so on. This data then finds its way to the scammers who use it to launch phishing scams. So even if you later realise it's a scam, you'll still hand over your personal details.

By directing you to dishonest exchanges, scammers aim to get you to trust them and invest as much money as possible. Typically, you will never get back the amount of money you invested. You may see your investment growing in your stock exchange account, but in reality, those numbers will only remain on paper. Only when you demand your money back will you realise that you have just been duped.

In some cases, you may be contacted by so-called financial investment advisers. They will help you invest your money in certain assets and make sure that these investments make a lot of money. Some may even help you to withdraw your money. All this is done to gain trust and encourage you to invest even more money. So these financial investment advisors will encourage you to invest more, using the classic ‘if you want to make more money, you'll have to invest more’ formula. But once you fall into this trap, you will never get your money back.

If you don't want to fall into the traps of dishonest crypto exchanges, just be mindful of their modus operandi. Don't think that your capital is too insignificant to be scammed. Always be on your guard, as anyone can be scammed. The most important thing is to have a well-defined method of checking to recognise good exchanges.

Always do your own research

The goal of unscrupulous exchanges is to gain the trust of users over a period of time and then deprive them of their funds. The recent crushing collapse of the famous FTX exchange is a clear illustration of why it is better not to trust external signs. The first way to avoid becoming a victim of unscrupulous exchanges is to always take the time to do your own research before clicking on anything. This is the principle of DYOR (Do Your Own Research). In fact, given the phenomenon of social media, influencers and artificial intelligence, it's best not to trust any adverts referring to ‘so-called’ opportunities.

Beware of financial investment advisors

When a so-called ‘financial advisor’ unexpectedly sends you an email you didn't request a response to, be on the lookout. The smart thing to do is to delete the message immediately and not engage in correspondence, even if the content seems harmless and polite. No matter how tempting the offer looks, don't let your curiosity or greed make you click on the links. Scammers know very well how to take advantage of these weaknesses.

Enter exchange links in your browser

Suppose you come across an attractive investment opportunity, but you are not sure if it is reliable. In this case, it's important to be careful not to click on links, even if the URL looks like the address of a website you know. Scammers can create an exact replica of a trusted resource, and one wrong click can lead you straight into their trap.

Instead of following a link from an advert, it's better to manually enter the website address in your browser and visit it directly. For added security, keep bookmarks on verified exchanges or add their URLs to your favourites so you can always access them without the risk of landing on fake pages.

Look for the slightest clues

If something on an exchange seems suspicious to you - whether it's an unusual font, strange errors in the text or poorly constructed phrases - don't try to convince yourself it's safe. It is better to leave the site immediately. Trust your intuition: if something tells you that something is wrong with the exchange, refrain from creating an account. To dispel doubts, find reviews about the exchange on verified resources. If there are few reviews or they cause doubts, it is better to refuse to use this site. Follow these recommendations and always stay on the lookout - this will help you avoid falling into the trap of scammers.

Conclusion

In this day and age where scammers are becoming more and more sophisticated, it's important to stay one step ahead to safeguard your funds and protect yourself from being scammed. Remember, the safety of your investment starts with being informed and thoroughly checking all offers and platforms. You should never rely on luck or trust tempting promises of quick profits. Your best tool is a careful and critical approach to everything related to finances.