Which red flags should be taken into consideration while using crypto platforms?

Which red flags should be taken into consideration while using crypto platforms?

Written by Alison Lurie, In Crypto, Published On
April 10, 2023

When using crypto platforms to trade, stake, lend or borrow assets, it is essential to be aware of potential warning signs. Unfortunately, there have been cases of illegitimate projects that have caused customers financial loss due to mismanagement or fraudulent actions. In this article, we’ll discuss the red flags you should look out for when selecting a cryptocurrency platform to protect your investments. With a platform like bitcoins-evolution.com you can exchange your fiat money for this virtual currency.

Red Flags To Watch Out for While Using Crypto Platforms

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Promises that seem too good to be true

You can make some extra money by utilizing your assets on a lot of crypto platforms. It is possible to accomplish this by performing yield farming, staking, participating in crypto video games, saving as well as lending your money. A lot of people are drawn to the idea of earning cash with crypto, however, it’s crucial to keep in mind that cybercriminals will also be conscious of this. They are prepared to make huge promises to lure victims in.

A program boasts to have the ability to provide you with a 30% APY benefit on your farm investment, as an example. This might look like an excellent deal, but it is an incredibly good offer which probably would not be economically viable for any platform. It isn’t unusual to notice high APYs as well as interest rates, though they must be taken with caution.

The same can be said for asset prices. You might be working with fraud when a broker lists an item at a cost which is considerably higher or lower compared to its present market value. It’s usually a wise decision to study the market worth of a particular asset on a reputable site, like CoinGecko, before purchasing it on a marketplace.

No Fees Across the Board

On crypto sites, particularly exchanges, fees tend to be pretty typical. On cryptocurrency exchanges, maker costs, taker costs, stake costs, withdrawal costs, as well as deposit charges tend to be typical, and that is unnerving for individuals that want to trade with no charges. Some crypto exchanges do not require any commissions, which could look like a large advantage.

To compensate for the absence of trading costs, a few platforms charge a little higher rates for assets. It is possible that these services are legitimate, though you must be aware of virtually any limitations before you start trading. Cybercriminals might make use of the lure of no fees as a means to lure victims. Therefore it is essential you keep an eye out for some other indicators and also read up about the product in issue before you pay one cent.

No Customer Verification

Lots of crypto services call for an individual to complete some sort of customer verification once they register for an account. This lets the platform feel certain they are working with a real and legit person. This’s usually associated with KYC – Know Your Customer – which is a standard that banks have to follow to be able to confirm the identity of their clients. This allows businesses to better defend themselves from fraud as well as money laundering – two common cybercrimes in the crypto community – by improving their security procedures.

Lacking Security Features

In case you choose to provide a crypto service access to your money, payment details, personal keys, and any other critical info, they must have the needed security measures set up to shield you from hackers. Consider, for example, Coinbase. This particular central crypto exchange has a variety of helpful security features, for example, two-factor authentication, standard address whitelisting, cold storage space of most assets, along with background checks for personnel. You can be better protected against online scams by implementing these measures.

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