How to Identify a Scam Crypto Exchange?

How to Identify a Scam Crypto Exchange?

Disclaimer: The textual content beneath is an advertorial article that isn’t a part of editorial content material.

Most of the time, the selection of a crypto change makes the buying and selling expertise both a breeze or a nightmare for novices. But with so many choices (since there are lots of of crypto exchanges on the market), there’s a slight probability you’ll come throughout a scammy one.

Yet, how do you separate the wheat from the chaff? To be sure you don’t occur to deposit your funds to an change that’s solely going to get away with the cash and to allow you to separate the wheat from the chaff, we’ve elaborated on the important thing components to listen to.

#1 Be cautious about buying and selling quantity and liquidity

In the world of digital property, costs have a tendency to change in a cut up second. You, as a dealer, may need to make strikes throughout these value fluctuations and purchase cash which have the potential of going to the moon or promote those which are doubtless to flop with out ready for too lengthy.

To give you the option to get essentially the most out of each second in crypto, the change you have got deposited your cash into ought to fulfill your purchase and promote orders promptly, at a value as shut to the one you beforehand set, with out making you pay a large markup.

That’s precisely why crypto exchanges have to be liquid, and those who’re sometimes have a constantly excessive each day buying and selling quantity. It’s protected to say that crypto exchanges are roughly liquid relying on the variety of customers they’ve.

It additionally goes with out saying that rip-off crypto exchanges don’t have giant bases of customers, or customers commerce their property occasionally and the variety of orders is kind of low. When nobody is keen to purchase or promote cryptocurrencies, you haven’t any different selection however to promote at a dramatically cheaper price or purchase at an outrageously excessive value.

#2 Check up on deposit and withdrawals limits

No matter if you’re a crypto dealer or investor, at a sure level, you’ll positively need to money a few of the cash out. Most respected crypto exchanges have set cheap minimal and most withdrawal and deposit necessities. For occasion, you can begin buying and selling on ChangeNOW with as little as USD 2. And then, some crypto exchanges have minimal deposits of USD 200, which appears, you’ll agree, a bit suspicious.

On the opposite hand, most exchanges have strict limits when it comes to withdrawals, which is completely effective. However, withdrawals ought to be easy and the minimal withdrawal quantity ought to be cheap as effectively. Don’t put your belief into an change that requires you to collect a important quantity of capital to give you the option to make withdrawals.

#3 Keep a tab on the charges

Crypto exchanges wouldn’t exist if it wasn’t for the charges that they cost each time customers make trades, deposits, or withdrawals. Fees differ from one change to one other and go from 0 to 4.5%, relying on the kind of transaction.

Although ChangeNOW does not disclose precise charges, we discovered that charges differ relying on a pair and quantity; about X% on a network-fee heavy pair like BTC-ETH, and about X% on others like TRX-XRP. If a crypto change is charging irregular charges, you may relaxation assured that they solely need to rip you off, and you must positively keep away from such offers.

#4 Check their buyer assist

Provided you might be utilizing a crypto change for the primary time, you’ll in all probability be needing a while to get to understand how it really works. Sometimes, you may additionally want extra assist or a few of your questions answered. And, realizing how dynamic crypto markets are, you’re going to want the solutions in a matter of minutes! With scammy crypto exchanges, contacting somebody from their buyer assist is both inconceivable or their brokers take a very long time to reply.

#5 Do the background test

There’s nothing flawed with studying on-line evaluations earlier than committing your belief to a sure on-line service. Google is your pal so ensure that to see what customers have to say about a couple of exchanges you take into consideration. Also, strive discovering extra information in regards to the staff behind the platform. Are they doxxed? Can you discover their profiles on LinkedIn and different social media? Do these folks appear actual? Fraudulent exchanges present little or no to no details about their groups. 

Also, ensure that whether or not they have a robust digital and media presence. Have you ever seen them attending or talking at occasions and conferences? Are they constructing partnerships? All these components matter whenever you’re making an attempt to work out which exchanges are respected and reliable and which of them aren’t.

#6 See if they’re insured or not

Gemini, Binance, and FTX are amongst a few exchanges that insured their customers’ funds. This actually instills belief of their providers since entrusting cash to a firm you already know little or no about doesn’t appear to be a smart resolution.

Crypto exchanges that supply insurance coverage shield their customers from hacks, rug pulls, and theft simply to title a few circumstances. Keep in thoughts that not all exchanges have the identical insurance coverage, and you must test what every covers.

Although having a wholesome insurance coverage coverage is such a good thought, not all exchanges supply this stage of safety. The ones that don’t merely don’t care that a lot about their customers, and, may very well be fraudulent.

#7 Find out about their safety practices

Trusting somebody together with your cash is a large factor. Thus, you must hold a test on safety practices completely different exchanges have (not less than in the event you don’t need to find yourself empty-handed). As a rule of thumb, crypto exchanges which were round for years and have a enormous base of customers are essentially the most safe, however, after all, there are some exceptions.

BitMart is a excellent instance of a well-known change that also received hacked. In this cyber assault, someplace between USD 150,000 and USD 200,000 have been stolen. No platform is 100% safe but it surely’s frequent sense that you just shouldn’t be investing important quantities of cash into exchanges which have a historical past of cyberattacks. While some platforms endure from assault, others assist them get their funds again.

Scam crypto exchanges don’t even use fundamental protections resembling 2FA whereas those that care about their customers’ property sometimes use a number of layers of safety, together with facial identification or biometric login, and require offering government-issued identifications upon opening a new account so as to chase away imposters. Some of them even require authentication when customers need to change funding ranges or purchase or promote their cryptocurrencies.

Also, it’s protected to say that non-custodial change providers appear to be far more dependable than centralized custodial exchanges. Why’s that? Non-custodial crypto exchanges (one among which is ChangeNOW) by no means pressure you to enroll, respect your privateness, and provide the final management over your funds. As lengthy as you might be preserving your non-public keys securely, you don’t have to fear about hackers, authorities laws, or sanctions. 

#8 Think in regards to the asset decisions they supply

It is almost inconceivable to have all the digital property you have an interest in listed on a single change. After all, with greater than 10,000 cryptocurrencies, and 100,000 buying and selling pairs, it’s all comprehensible.

Exchanges do their greatest to checklist cash with excessive market caps however a few of the lesser-traded ones with enormous potential as effectively. This apply helps a lot with getting within the eye of energetic crypto merchants and buyers. And then, some platforms checklist somewhat obscure privateness cash solely, which may be a main crimson flag.


It doesn’t essentially imply that each crypto change that has greater charges or lists shady cash is a rip-off, nevertheless, in the event you come throughout the one which ticks all the (damaging) packing containers we’ve listed, then you definitely’d higher run away. The upshot is you could by no means know whether or not your funds are 100% protected because the whole crypto area nonetheless lacks regulation however you may, not less than, avoid platforms that scream “give us your money and get lost”.

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