The cryptocurrency industry is increasing at a rapid rate and, whilst a number of brokers that operate within the industry are legitimate, trusted traders there are still some who operate who are unregulated and untrustworthy. Investing in cryptocurrency has become safer the longer it has been around and it is becoming increasingly easier to spot legitimate investment opportunities from the scams.
But, when it comes to traders, a lot of investors are still falling victim to broker scams. This is because many traders, especially new or inexperienced traders, aren’t quite sure what to look out for when it comes to making trades. Let’s take a look at just some of the ways in which you can make sure a broker is regulated.
If you begin to receive unsolicited contact from a broker or investor, or from a company with whom you’ve never done business with, then you should be wary as to the requests or advice they are trying to provide. Try to avoid being enticed with investment seminar invitations, promises of high returns or other free gifts as these are tricks often used by scammers in a bid to get you to lower your guard and invest with them.
If a broker tries to use high-pressure sales tactics or offers “once in a lifetime” trading opportunities, steer well clear. Often these brokers will take your investment and go against their own advice, trading instead in coins or opportunities where the return will be very low, losing your money. They will then likely cut all contact with you or block you from contacting them.
One of the first things you should do when looking to trade with a new broker is to research them. All it takes is a simple online search of their broker and trade name. A reputable, trusted broker will likely be mentioned across numerous websites with good feedback from other traders, or better yet, be featured on a regulated review site.
When searching for an unreputable or untrustworthy trader, you should still be able to find mentions of them online, whether it’s from online reports, past client conversations or news forums.
One of the worst things you can do when trading, especially if you have chosen to go with a new broker, is to leave your statements to take care of themselves. Be sure to regularly check your statements, whether this is online or through printed copies, as this can help you spot any wrongdoings or mistakes in your trading early on.
If you see something you don’t suspect, or something seems suspicious, you can act in a quick manner to detect mistakes or wrongdoings. If your returns aren’t what you expected, or what your broker promised, then you can have a conversation with them. Don’t accept complicated reasonings or assurances if you don’t understand them and, if you can’t get a straight answer, ask to speak to someone higher up in the company.
When trading with a new broker, it’s all too easy to become overly trusting of them early on. After all, they’re dealing with your money and have promised you good returns, right? Whilst it is rare to deal with an unlicensed broker, that doesn’t mean that regulated brokers can’t have wrongdoings or become embroiled in scams.
Licensed brokers can, and have, persuaded traders to make investments which benefitted them more, or use your money for their own reasons. You can easily find a trusted regulated broker through many online resources, such as BrokerCheck, but always be cautious until they have provided you with what was promised.