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Author: Admin | 2025-04-28
What are fake cryptocurrency exchanges?Fake cryptocurrency exchanges deceptively present as legitimate trading platforms but are in fact fraudulent exchanges designed to steal users’ funds or personal information. These fake exchanges mimic the appearance and functionality of real exchanges to deceive users into thinking they are trustworthy. They often aim to attract users by offering attractive features like low trading fees or high returns on investments, but their primary goal is to scam users.Common characteristics of fake crypto exchangesNo regulatory complianceIn the US, the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and IRS all regulate cryptocurrency trading platforms. They’re required to meet certain standards and protect customers’ investments similar to the ways traditional stock and futures commodities platforms must. These regulations are levied on both a federal and state level, and legitimate entities comply with them.Fake exchanges disregard regulatory oversight and compliance, which cane be apparent when using their service. You won’t find standard customer protection protocols like Know Your Customer, which asks for a customer’s legal name, birthdate, address and ID number, among other details to confirm your identity. Absence of these protections is a sign the exchange is not complying with anti-money laundering laws and welcomes illegitimate business.Unrealistic promises or offersFake exchanges use unrealistic promises like guaranteed high returns, “risk-free” trading, or extremely low trading fees to entice victims to sign up. In many cases they will also create deepfakes of known crypto or tech leaders to feign social proof and endorsement of the platform. The more unrealistic promotion you see happening on an exchange, the more likely it is that platform is fraudulent.Poor or no security measuresLegitimate crypto exchanges invest heavily in security measures to protect users’ funds and personal information. Fake exchanges often have poor security measures or none at all, making it easy for hackers to steal funds or for the operators to disappear with users’ money.Lack of transparencyFake exchanges don’t just lack transparency in their operations, they thrive because of it. They avoid providing clear information about the team behind the platform, the company’s location, or how user funds are stored and protected. They will often promote this lack of transparency as a lack of customer friction and a user-friendly design choice. If you’re choosing a crypto exchange, don’t trust platforms that aren’t clear about their team or key parts of their operations.Fake volume and trading activitySome fake exchanges artificially inflate their trading volume and activity to create the illusion of liquidity and popularity. Because crypto is anonymous by nature, it isn’t difficult for fake exchanges to inflate trading activity with fake transactions from smurf accounts controlled by the scammers behind the fake exchange. Be skeptical of high trading volume on lesser known platforms and check transaction ledgers to confirm the nature of trading activity is legitimate.List of known fake crypto exchangesAs of 2024, here are some known fake crypto exchanges to avoid using:I Texus TradeDartyaBravoFXBIPPAXDigi CoinsPrimegroup.globalSafepalesa.comEthereum x corpLidcoin Trading CenterMindstoneltd.orgWhitcoin Pro ExchangeX Coin TradingFX Alliance TradersPinance.ioFile Coins FoundationHOO Tech LtdOS Option
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