How to Spot an Untrustworthy Crypto Exchange – 2024 Guide
The world of cryptocurrencies is a very diverse and complicated one. The newcomers who want to experience it and enjoy all of the now-famous benefits of owning digital assets tend to be quite overwhelmed with the amount of new information they are met with. Strange technical terms and systems they have never heard of before need to become familiar to them quickly if they are to start off their crypto journey the right way.
One of the most important things about the whole crypto industry that every novice investor needs to understand are crypto exchanges. It is all fine and dandy if you already know about mining, about blockchain technology, and the different cryptos. However, this is hardly enough. It is not even enough to pick the currency you want to invest in and support. What is crucial is to know how and where to do your daily tasks. In addition, you need to have a safe space to optimally use and store your assets without anyone being able to gain access to them.
One Stop Destination
With all of that being said, there is only one thing left to do and that is to tell you that all of these things can be found in one place. No matter what you need or want to do, a cryptocurrency exchange is the place to be, but you still need to be careful. As with numerous other software out there, there are untrustworthy exchanges that only exist to take advantage of the unsuspecting users.
In order to properly navigate the internet and be a successful crypto investor, you need to know that. More importantly, you must know how to spot an untrustworthy exchange. In this article we talk more about it and reveal to you how you can tell a fake exchange from a legitimate one. Make sure to read everything carefully. To learn more about this crucial topic, we also advise you to check out Crypterium.
Negative or Nonexistent Reviews
The number one rule of using something on the internet, buying something, or doing whatever for that matter is doing some basic research about it. And when it comes to research on the internet, it is mostly done by simply Googling about it and finding reviews from the past users and customers. This is all the proof you need to base your initial opinion on the matter and decide whether or not this thing is for you. People who came before you shared their stories and first-hand experiences so that the others know if they should do the same or skip it for something better. Reading reviews is important with something as rich and diverse as crypto exchanges, and you need to do it. If the reviews are generally positive, you have nothing to worry about. If they are negative, or if they do not exist at all, it would be better to skip the exchange you are considering in favor of another one.
Limited Features
A crypto exchange should have different features that aim to help the users perform their tasks and obligations more easily and quickly. Buying, selling, and trading cryptocurrencies is the bread and butter of every exchange. A whole section with the latest news and updates is also crucial. There needs to be a page with advice and tips to help the newcomers. Of course, the electronic wallet where you keep your balance has to be an integral part of your account. All leading exchanges also give you a wallet when you register, so make sure to pick only that type. A big red flag is a cryptocurrency exchange platform that lacks any of these basic functions. It means their operations are incomplete which can further mean they are illegitimate. It is enough for the scammers to make something that looks and feels like the real deal as many people go in blindly and do not look for suspicious behavior.
Constantly Asking for Credentials
The most important reason why digital currencies have become so popular is the way they operate. Rather, the way the people can and do use them. Anonymity and security are two things that have to exist if the business is going to get done properly. Without them, there is no point in using cryptos over regular money. Exchanges that are too aggressive with constantly asking for your personal and financial info are an instant skip. Such red flags must never be ignored. The only time you need to use the key to your electronic wallet is just before you are about to complete a transaction. Furthermore, you cannot be involved in a transaction if you have not previously made a deal with somebody else. Therefore, nobody should ask for your credentials out of the blue. If it happens, know that somebody is trying to commit some type of fraud and strip you of your digital currency balance. The exchange uses fake accounts too, which do not match the customer profile.
Amount of Currencies
There are thousands of cryptocurrencies in existence nowadays, over 6,000 as of this year. This means that you can do a lot of different things and pick and choose any combination of digital assets to operate with. The old saying goes, ‘do not keep all of your eggs in one basket,’ which here transfers to, ‘do not invest all of your money in just a single crypto currency.’ Investors already know this, which is why they are diversifying their portfolios right from the start and why they do their business with at least a handful of currencies. It only makes sense because they are unpredictable and because you want to be able to sell more of them when they are valuable as well as buy more when they drop in value. None of this is possible however if the exchange you have picked to work with has a very limited number of cryptos. It will probably have Bitcoin, Ethereum, and a few other big ones. But what about altcoins (alternative coins) that many new investors prefer? If the exchange does not support a bunch of different virtual currencies, it could be a potential red flag.
