Buying cryptocurrencies like Bitcoin, Etherum or other currencies it’s not the same as buying something online like from Amazon. Your bitcoins should not be stored on ANY exchange! If you want a secure Bitcoin wallet you will need to use a hardware wallet like the Ledger Nano X.
Research – one of the most important steps
The best way to avoid cryptocurrency fraud is to do your homework before investing your crypto coins. There’s plenty to choose from – in fact, there are over 500 online exchanges.
So, in order to avoid being scammed, take your time to research the exchanges: read their blogs, look at the conversion rates, gains, ICOs, over-the-web security protocols. For extra safety, you could shoot an email to support or a company’s representative to ask about the exchange.
Here is the list of frauds and scams usually created by scammers :
- Fake ICOs (initial coin offerings)
- ‘Overnight’ exchanges
- Fraudulent wallets
- Pyramid schemes (Ponzi)
- Classic phishing
- Unregulated brokers.
- Automated trading systems
- Pump & Dump online groups
- Fake emails
There are many problems that people face when it comes to buying cryptos such as :
- Blockchain is hard to understand and yet complex.
- Blockchain requires users to be well versed in computer security
- Blockchain is slow and impractical for retail transactions
- Blockchain has no built-in consumer protection
- Blockchain has technical weaknesses vulnerable to orchestrated attacks
In case you think you have been scammed or have your doubts before you put a complaint decide what complaint is about. Complaints can be about amounts, delays, not receiving the right amount, high fees, etc…
Coinbase is the leading platform through which Americans buy digital currencies bitcoin, ethereum and litecoin” as of late last year.
It’s very important to mention that although Coinbase has the most number of complaints in the CFPB database vs. other cryptocurrency exchanges it is unfair to assume they provide a bad product, service, etc.
According to Coinbase most of the complaints in the U.S last year were about :
- 40% of the money was not available when was promised.
- 7,9% managing, opening or creating an account
- 11.7% frauds or other scams
- 20.5% other transaction problems
- 7,9% other service problems.
How can you make to complain about cryptocurrencies?
In the U.S., consumers can send their complaints to the Consumer Financial Protection Bureau (CFPB). The CFPB is the government agency tasked with consumer protection in the financial sector. If you have lost access to your funds on a U.S.-based exchange or feel that a cryptocurrency company’s lack of service has led to a loss of funds or potential trading revenue, you can reach out to CFSB who will investigate the matter on your behalf.
Finally, there are complaints about other U.S. based exchanges found in the CFPB database, namely for Kraken and Gemini. However, CFPB database complaints are so few the data provides nothing meaningful.
Recently ExchangeRatings has been created that helps people around the world complain about the problems they have with exchanges. Furthermore, this website helps ratings and reviews for most popular exchanges like coinbase, binance, kraken etc…
First of all, self-educating is a must when it comes to buying cryptos. You need to read different guides on how to buy and safely store your cryptocurrencies.
Some tips we suggest are that :
- Always use 2-FA authentication such as Google authenticator.
- Holding cryptos in offline place such as Ledger Nano
- Check all information before you use exchanges. There are many websites that are scamming. Those exchanges that are verified, registered by your government those are the ones you would want to go with.
- Be careful before you invest in coins that are not listed on big exchanges like Binance, Bittrex, Poloniex, KuCoin, Kraken, Bitfinex, GDAX, OKEx, Bitstamp, HitBTC, Bitfinex, etc…
In an environment like the current cryptocurrency market, potential investors should be very careful to research what they’re putting their money into and be sure to find out who is involved as well as what the actual plan is for making real money – without defrauding others.
If you want to learn more about the difference between Litecoin and Ethereum, you can check out this awesome detailed article.