0 37
Avatar for Ahbam
Written by
3 years ago

It's convenient to assume that investing in cryptocurrencies is getting rich for all. With questionable goods and services, many scammers take advantage of merchant greed.

Here are the scams that are most common:

Initial coin offerings (ICOs)

For newly launched cryptocurrencies, ICOs are fundraising mechanisms. In the new company, traders in ICOs earn tokens. Although many ICOs are legitimate, the vast majority have no real business plans or technology behind them. Many ICOs have problems. Some ICOs are released with nothing more than a whitepaper written by individuals without expertise in technology or industry. Often, new altcoins make unfounded claims about their products.

ICO fraud

Cracking down on ICO fraud has begun by states, regulatory agencies, and law enforcement: The US Securities and Exchange Commission (SEC) has brought fraud charges against ICOs that were sold on the basis of false statements. The selling of ICOs has been banned by China. Many people who are familiar with fraud, including Jordan Belfort, the infamous "Wolf of Wall Street," have described ICOs as the largest scam ever.

Unregulated brokers and exchanges

There are thousands of unregulated online exchanges and brokerage companies selling bitcoin and cryptocurrency trading items, if not hundreds. Traders should be suspicious of advertisements and promises of fast wealth that are too-good-to-be-true. Many of these companies will charge you outrageous commissions once you deposit money, or make it very hard to withdraw funds. Your money will simply be taken by some of the worst criminals.

Bitcoin trading system

The incredible volatility of Bitcoin has spawned an automated trading systems industry. Through the negotiation of rates between various exchanges, the promoters of these goods offer traders a way to beat the competition. Bitcoin exchanges also have costly processes of withdrawal and levy high charges for exchanging bitcoin into fiat currencies such as dollars or euros. The settlement of bitcoin transactions can also take hours. These variables can remove any bitcoin arbitrage gains and could even lead to losses.

How to Safely Trade Cryptocurrencies

Trading in cryptocurrencies is risky and highly speculative, so there is no way of trading at low danger. However by following a few basic rules, traders can minimize some risks.

Trade only what you can afford to lose

Cryptocurrencies are far more volatile than stocks and bonds, and the industry is rapidly evolving. A month or a year from now, there might not be an altcoin that is common today. In other words, the real risk that they may lose all their deposits should be considered by traders.

Research Carefully

Study Before opening accounts, traders should read feedback regarding brokers and exchanges carefully. The cryptocurrency industry makes headlines with new products and exchanges every day, so it is important to find accurate, current details. A source of knowledge and advice could be forums like CryptoCompare and BitcoinTalk.

Choose an Appropriate Trading Instrument

Traders can choose an acceptable trading instrument to buy cryptocurrencies through a broker or an exchange, but there are other ways to speculate on crypto prices as well.

$ 0.02
$ 0.02 from @TheRandomRewarder
Avatar for Ahbam
Written by
3 years ago