How To Identify And Avoid Fake Cryptocurrency Exchanges: List Of Fake Crypto Exchanges

When I first started trading in cryptocurrency, everyone told me how amazing and secure it was. And I believed it too, until one day. I found a website which asked me to invest only $137 per Bitcoin. Needless to say, I was really happy back then because the price of BTC was almost $2,000. And it was impossible for me to buy even a single coin. 

However, I didn’t buy it, thanks to my best friend. He told me, verbatim, ‘It’s too good to be true, so it must be a scam.’ And he was right. When I went back to the website, I could literally point out the telltale signs of fraudulent crypto exchanges. But I was so drowned in the ocean of hope and FOMO that I didn’t even notice them at first. 

The good thing is, I learned how to spot scams, and now, I can help you identify them as well. I’ll also share a list of fake crypto exchanges in the later part of the article. So, stay tuned. 

How Do Fake Exchanges Trick Investors 

It’s a classic magician’s misdirection. The trick doesn’t lie in what you’re seeing, it’s in what you don’t see or ignore. Because they don’t mean too much, like the color of the logo or a slight misspelling in the URL. However, in most cases, scammers don’t go so far as to create a fake website which looks and works similarly to the exchange you’re using. Instead, they lure you by offering ridiculously high sign-up bonuses, ‘guaranteed returns,’ or referral incentives.  

In some cases, they may also manipulate the numbers and fees to make their website look busier than usual. So, if you find a website where the trading volume looks too high, it’s better to visit a reliable platform, Bitcoin.com, to double-check the prices before making a trade. 

Oh, before I forget, let me remind you of something more important. A real trading or exchange website will always have a specific team for every process – whether you’re there for trading, talking to customer support, or something else.  

A fake website is usually created by one person, so they tend to have fake photos of the team, location, regulatory licenses, and unclear details about the founders. Also, customer support tends to be nonexistent on these websites. 

A List of Fake Crypto Exchanges 

When talking about untrustworthy crypto platforms, the first name that comes to mind is Bitsane. But before I talk about it, let me show you how it used to look – 

Source: PR Newswire 

Looks quite normal, right? Bitsane was an Ireland-based cryptocurrency exchange platform, which took the crypto deposits of almost 246,000 users and vanished suddenly on June 27, 2019. And it was actually approved by Ripple as well. Funnily enough, Forbes tried to reach the company’s CEO, Aidas Rupsys, and the CTO, Dmitry Prudnikov, after the incident – only to find that they vanished too, along with their LinkedIn profiles. 

PlusToken, on the other hand, was a full-blown Ponzi scheme, which is estimated to have a worth of around USD 2 to 2.9 billion. They operated worldwide but focused mainly on the investors from South Korea and China. The company offered monthly payments to its users if they were using their wallet and had also released a token, called Plus. Needless to say, the website, as well as the wallet and tokens vanished overnight. WoToken was another Ponzi scam that stole more than $1 billion by promising easy profits. 

BitKRX was a bit unique, though. By including the initials of Korea Exchange (KRX) with their name, they pretended to be associated with the organization. And this small lie made them look credible as well, considering thousands of people kept on investing through the said exchange platform – until one day, they couldn’t do it anymore. 

FXT Token is a textbook example of a pump-and-dump scam – which hyped up its coins to sell as many as they could and then dumped them.  

How Do You Avoid These Scams 

It’s simple – look out for the red flags and avoid anything that looks too good to be true. For example, before you sign up for any platform, don’t forget to check the URL and the entire website first. Even if it has everything you’re looking for, I’d ask you to visit a platform like Twitter, Reddit, or TrustPilot to check real user reviews of the same website. 

Secondly, before you start trading on a website, go through it thoroughly and check if they have any licenses or not. While cryptocurrency is decentralized, it’s important to use an exchange that is overseen by a central authority. If you don’t find anything on the website, you can also ask them via email – and if they refuse to show anything, don’t think twice. 

You can also use a small trick to check if you’re dealing with a real exchange or a fake one. All you need to do is deposit a small amount of money in the exchange and check if you can withdraw it or not. If it’s taking too much time or refusing to process your request – you’re probably dealing with a fake exchange platform. 

The Bottom Line 

Apart from everything I’ve mentioned before, you should also keep a close eye on the security features a website may have. A good crypto exchange platform will endorse features like 2FA, withdrawal accecptlist, and cold storage, where you can keep your funds safe. If it doesn’t offer good security, whether it’s fake or not – you should always avoid it.