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 exchanges
No regulatory compliance
In 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 offers
Fake 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 endorsem*nt 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 measures
Legitimate 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 transparency
Fake 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 activity
Some 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 exchanges
As of 2024, here are some known fake crypto exchanges to avoid using:
- I Texus Trade
- Dartya
- BravoFX
- BIPPAX
- Digi Coins
- Primegroup.global
- Safepalesa.com
- Ethereum x corp
- Lidcoin Trading Center
- Mindstoneltd.org
- Whitcoin Pro Exchange
- X Coin Trading
- FX Alliance Traders
- Pinance.io
- File Coins Foundation
- HOO Tech Ltd
- OS Option Exchange
- Privmoney (Private Money)
- GE Chains
- DCEX Exchange
- Sun Bit Proa
- Stunwill Ltd
- Poloina
- Rudolf Stark Pro Station
- Trusted Stations
- Good-bookingline.com
- bitcoinfied.com
- legalcryptocoinstrade.com
- Bitcoin-win.com
- Bityard
- us.gocoinoptions.com
- The Big Mars
- Tony Alin Trading Firm
- Julysil
- MT7 Coin
- Dahua Top VIP (Dahuag VIP)
- Micavhe.top
- gmelaunch.com
- Rhenium (Nodium)
- Spotalertweb.com
- Mantao Network
- Bytobit.com
- Atmos NOAH Cryptocurrency Investment Group
- OpenSoil (Open Soil X)
- CoinList Ro
- Getbonusx2.com (getx2.net)
- Crystal Linkz FX (Crystal Linkz FX Link Zen)
- CoinWpro
- Turbine Trade FideFX LTD (fiefx.cc)
- Yo Bit Pro
- Public Realm
- Whitemax.us
- Turtsgrupfk.top
- 100Ex
- Coinegg
- Bitcoin Vest Cloud
- ExNow
- Kenskr AI
- Uniswap.LLC
- Global tek Forex Trading
- Nasdaqon.com
- Amead Digital Currency Co. LTD
- Coin Pro X US
Common scams fake crypto exchanges can cause
- Pig butchering scams – Many pig butchering scams rely on fake exchanges that give scammers control over a victim’s wallet and entire asset profile. They also trick victims into adding their bank account information and other financial assets to steal funds from there.
- Fake crypto wallets – Fake exchanges sometimes promote wallets that are also hidden backdoors to give scammers access to a victim’s funds.
- Crypto investment scams – Teams behind fake exchanges may also promote other projects and investments they are working on, like new coins, DeFi projects, or NTFs. If the exchange is a fake operated by scammers, it is often a gateway to trick victims into falling for other related crypto scams.
- Rug pull scams – Similar to crypto investment scams being linked to fake exchanges, teams behind the fake exchange may promote coins or new investment opportunities on the platform only to “pull the rug” and abandon the project once they have enough investors.
How can you spot a fake crypto exchange?
- Check if the exchange is regulated by a reputable authority. Legitimate exchanges usually comply with regulatory requirements like AML and others enacted in the jurisdictions where they operate. Look for information about regulatory licenses or registrations on the exchange’s website.
- Research reviews, forum discussions, and social media posts from other traders about an exchange before using it. Pay attention to any complaints about funds being withheld, poor customer service, or suspicious activity.
- Confirm the presence of security features like two-factor authentication (2FA), cold storage for funds, encryption protocols, and regular security audits.
- Make sure the exchange readily offers transparent information about its team, company background, physical address, and regulatory status. Be wary of exchanges that lack transparency or provide vague or conflicting information about their operations.
- Check the exchange’s trading volume and activity on reputable data aggregation sites. Be cautious if the reported trading volume seems unusually high compared to other exchanges or if there are sudden spikes in activity without plausible reasons.
- Evaluate the exchange’s website and trading platform. Legitimate exchanges typically invest in user-friendly interfaces and robust trading functionalities. Be skeptical if the website appears poorly designed, contains grammatical errors, or lacks essential features.
- Test the exchange’s customer support system by reaching out with questions or concerns. Legitimate exchanges usually offer responsive customer support through email, live chat, or ticketing systems. Beware of exchanges with slow response times or unhelpful support representatives.
- Be cautious of exchanges that make unrealistic promises, such as guaranteed high returns on investments, extremely low trading fees, or exclusive deals for new users. If an offer sounds too good to be true, it probably is.
- Watch out for phishing attempts from fake exchanges posing as legitimate ones. Be cautious of unsolicited emails, messages, or advertisem*nts asking you to click on suspicious links or provide sensitive information.
- Engage with the cryptocurrency community to get feedback and opinions about the exchange in question. Platforms like Reddit, Bitcointalk, and social media channels can be valuable sources of information and insights from experienced traders.
