How many of the active crypto exchanges are scammers?

Started by RZA2008, Aug 12, 2022, 01:51 AM

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Any stock exchange turns out to be doubtful upon closer inspection, experts say.
Last year, the crypto market has qualitatively expanded compared to previous periods - the growth of the bitcoin rate to the level of tens of thousands of dollars per token made anyone who wants to make quick money interested in the exotic cryptocurrencies.

However, experts warn, the possibility of getting rich here is even worse than on the stock exchange: stock price fluctuations of hundreds of percent on the stock exchange are an emergency that has been remembered for years. Changing the value of cryptocurrencies within the same limits is the routine of the crypto market.

It is not possible to build a reliable investment strategy in the cryptocurrency market for at least two or three years, experts say. The only one who is guaranteed to win as a result of cryptocurrency games is the cаsino. That is, an exchange or platform where transactions are made for the mutual exchange of tokens, as well as their conversion into real money and vice versa.

At the end of last year, there were more than 450 crypto exchanges operating on the planet, operating with different transaction volumes.
Small ones are content with millions, large ones, such as HitBTC or Binance, operate with billions of real dollars. At the same time, none of the exchanges is something "real". Like cryptocurrencies, exchanges are based solely on the trust (or greed) of their clients, and in case of problems, there is simply no one to complain to.

The more people want to make money on cryptocurrencies, the more offers appear to give their money for another promising token or already known "crypto", in the hope of a favorable understanding of its further exchange rate behavior.

The main thing that those who want to quickly get rich forget about is that your currency, real and crypto, after entering the site is no longer yours.

The same castles in the air

One of the ways for fraudsters to get funds from citizens is a fake for a well-known brand or financial instrument. In the case of cryptocurrency exchanges, the situation is much simpler - there are no objective mechanisms to determine with what possibility on which of them your assets will disappear, which exchange is "honest" and which is "fraud". The most pessimistic players believe that any crypto-exchange will burst - the only question is when this will happen.

The tools by which the tokens you purchased for real money will disappear may be distant. It can be an investment in a "new, promising currency" - anyone can list new tokens. These may be hаcker attacks, although with the strengthening of security systems, this factor is becoming weaker day by day. First of all, you can lose your money through the "labor" of the exchange itself, which they were entrusted with. The number of reports of such incidents is growing exponentially every year.

In 2017, the South Korean authorities exposed one of the most notorious fake cryptocurrency exchanges. BitKRX was named to look like the cryptocurrency arm of the country's legitimate and largest financial trading platform, the Korea Exchange (KRX).

Based on the goodwill of the public towards KRX, BitKRX was able to attract investors who believed that BitKRX was controlled by KRX. But when customers who thought they bought bitcoin tried to access their funds, they found that their money was gone.

Authorities also arrested two people behind Komid, another South Korean exchange that scammed investors from the start. Their scheme involved luring customers into cryptocurrencies and spreading false information about token listings. After that, the third largest cryptocurrency exchange in South Korea, Coinbit, was seized by the police, as 99% of its transaction volume was reportedly faked to deceive customers.

In another crypto scam uncovered by a joint examination in the Netherlands and the UK, six people were arrested for setting up a fake online crypto exchange that scammed more than 4,000 victims in 12 countries out of an estimated $28 million in crypto.

Last year, reports of fraudulent exchanges have become a constant newsbreak.

One big scammer per month

With the rise in the price of cryptocurrencies in traditional money, the number of people who want to earn funds in this area is growing, and the popularity of this direction among crypto scammers is correspondingly increasing. According to Kaspersky Lab, in 2022 fraudsters will be able to deceive customers twice as much as last year - in the amount of at least $4.8 billion.

Even according to media reports, we can conclude that the wholesale closure of cryptocurrency exchanges has begun. The easiest way for a crypto exchange to shut down and keep clients' money is to claim a "hаcker attack." It is impossible to verify this, as well as to assess the real damage if the attack really took place. In some cases, there is also no one to send their claims to clients - most exchanges turn out to be offshore companies at best.

The crypto exchange Livecoin reported that it was closing after a cyber attack. The company issued a standby message in which it reported catastrophic losses, promising to return to customers the maximum of their funds - based on the assets remaining on the exchange. Reimbursement was promised to anyone who applied within a short period of time and also provided a significant amount of personal data.

Interestingly, before reports of a hаcker attack on the exchange, users' wallets were blocked without warning - they were deprived of the opportunity to withdraw their money. After this, a wild jump in rates and incomprehensible activity began on the website, the result of which was a message about the closure of the exchange.

The story with the HitBTC exchange developed in the same way. It is still working, but since February, users have been reporting the same symptoms - wallets are blocked "for withdrawal", there is an inexplicable dynamics of cryptocurrency rates and a lack of information from the exchange administration.

In April, two regional exchanges closed at once, including Thodex, the second largest crypto exchange in Turkey. The mechanism is known: the blocking of wallets, a message about the suspension of the exchange for a week to eliminate "abnormal fluctuations in the accounts", but later the exchange website finished working. During this time, the founder of the exchange, Faruk Fatih Ozer, managed to delete pages on social networks and escape to Albania with two billion dollars of clients.

At the moment, the US authorities have reported an audit of the largest crypto exchange Binance. It is possible that this message will be followed by other messages about the closure of trading floors.


Is the theft of cryptocurrency in general a scam (if so, in which countries)?
This is not money or securities, and what else is definitely indicated in the laws. And they have no obligation to return tokens on demand, not banks, after all.
This is not counting those exchanges that are clearly used for funds laundering.