As time goes on, the mainstream finance industry and the crypto industry are becoming more and more interlinked. As we reach the point where crypto is only a facet of finance, crypto starts to get the issues that plague the financial industry as well.
A Growing Problem
As cryptocurrency gets more and more developed and refined, giant financial bodies pop up, controlling massive coin exchanges and settling in as one of the world’s heavyweights. As more and more eyes focus in on the cryptocurrency, many of those eyes will have malicious intent. There is no way around it, just ways to control it.
As major players in the cryptocurrency industry launch futures and options platforms for many kinds of coins, other people see it as a way to scam money out of potential investors. Binary options, an already high-risk trading method, is the go-to choice for these malicious actors to commit fraud.
Regulatory bodies, the watchdogs of the industry, are taking significant steps to try and prevent this new influx of fraudulent companies aiming to steal investor funds. In the US, the two central regulating bodies for cryptocurrencies are the Commodity and Futures Trading Commission (CFTC) as well as the Securities and Exchange Commission (SEC). In the past two months, the CFTC cracked down on various binary options operations across the US that totals $15 million in funds.
The problem with the fraudulent binary options platform is that they are often based online, which makes it a bit harder to regulate. Added to that, the high-risk nature of binaries makes short work of inexperienced investors who think they can make a quick buck.
Adapting to the Times
Binary option schemes take significant steps to ensure they steal your money in various ways. The more sophisticated kinds create software that rigs the system on their platform. Even if you are supposed to “win” the bid, the software makes it that you “lose” the bid and ultimately lose your money.
Another classic move is to refuse the withdrawal of funds in various ways. The typical excuse is to continually return errors when the withdrawal is requested, or outright accusing the customer of fraud on the scammer’s platform.
Identity theft is also a very likely risk considering that these platforms already refuse to adhere to proper regulation. All investors need to be sure about the security of the site they give their essential information on. Things like credit card details, passports, and other forms of vital personal data are up for grabs on these fraudulent sites.
A Simple Reminder
The most important thing to remember is the fact that these scams typically promise exorbitant amounts of return value for investing with them. It’s an almost universal attribute to most of these scams. Please do not fall for any promise of extremely high returns. Focus on established companies and exchanges first, the giants of the industry, before moving out of their network to more dangerous grounds.
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Author: Ali Raza