10 SIGNS OF A SCAM CRYPTO
OR FOREX TRADING WEBSITE
The vast majority of frauds involving cryptocurrency or foreign currency trading,
also known as forex, begin on social media or through messaging apps. If
someone contacts you out of the blue, or you meet someone online who introduces
you to a trading website you’ve never heard of before, chances are it’s a fraud.
It doesn’t matter how much scam trading websites claim you will earn, or how easy or risk-free
they say it will be, you will lose any money you give them. Besides trolling for victims on social
media or messaging apps, here are 10 other telltale signs an online trading platform is a fraud:
1. It isn’t registered to trade forex,
futures, or options.
Many scam websites offer a mix of crypto
assets, forex trading, binary options, futures, or
other derivatives. But in order to solicit U.S.
customers, entities that trade forex or derivatives
must register with the CFTC and be members of
the National Futures Association. You can
check registrations at
nfa.futures.org/basicnet.
2. Trades crypto, but not registered
as a money service business.
Cryptocurrency trading platforms are considered
money service businesses (MSBs) by the U.S.
Treasury and must register with the Financial
Crimes Enforcement Network (FinCEN). Many
states also have requirements for
cryptocurrency trading websites to register. To
see if a site is registered, visit fincen.gov/msb-
registrant-search. Registration alone won’t
protect you from fraud, but most scams involve
unregistered entities, people, and products.
3.
No physical address, it’s clearly
fake, or offshore. (Try Malaysia)
If a centralized cryptocurrency or forex trading
platform doesn’t display a company address, it
means the site’s owners don’t want you to know
where they are. If there is an address, run a
street-view map search to see if the address is
real and looks like a legitimate place of
business. Avoid companies that don’t have a
U.S. headquarters. If the trading platform is
offshore, you may have little or no protections if
something were to go wrong.
4.
There is no customer service
phone line.
Just like missing addresses, no customer
service phone number is a sure indicator of a
scam trading platform. Fraudulent trading
websites might display messaging-app phone
numbers, but these are easy to fake and easy to
change. It’s also common for scam sites to only
offer live chat (often a chat-bot), email
addresses, or “contact us” web forms. But when
scams are exposed, the websites disappear,
along with any way of communicating with them.
5. The website’s age doesn’t match
its claims.
Look up domain registrations at
lookup.icann.org. The search results will tell
you when the web address was created. If the
company claims to have been around for several
years, but the domain registration is only a few
weeks old, you’ll know it’s a scam. Other trading
websites may claim to have millions of
customers or conduct billions of dollars in
trades, but such claims would be highly unlikely
if the site were only weeks or months old. Also,
be suspicious of websites that look or sound
similar to other well-known brands, or that don’t
end with dot-com.
$
How
Commodity Futures Trading Commission
1155 21st Street NW
Washington, DC, 20581
cftc.gov | 866-FON-CFTC (866-366-2382)
This publication was prepared by the Commodity Futures Trading Commission’s Office of Customer Education and Outreach. It is provided for
educational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal or
investment advisor before taking any action based on this information. The CFTC cannot attest to the accuracy of information contained in any
nonCFTC references or websites. References in this publication to any organizations or the use of any organization, trade, firm, or corporation
name is for informational purposes only and does not constitute endorsement or recommendation by the CFTC.
6. The website won’t accept
transfers from your bank.
Scam trading platforms won’t connect to
legitimate financial institutions because they’ll be
discovered as frauds. Instead, the scammers will
walk you through how to convert dollars to
cryptocurrency on a legitimate trading platform
first, and then ask you to transfer the crypto to
them. Remember, blockchain transactions don’t
have anti-fraud security systems like ACH bank
transfers or credit card purchases. Instead, they
obscure the scammers’ true identities and are
irreversible. By the time you discover your
money’s been stolen, it’s too late.
7. Investment returns are based on
how much you invest.
Many fraudulent trading sites offer “investment
plans” that promise returns of 50, 75, 100, 200
percent or more depending on how much you
give them. When it comes to investing in crypto
assets, there are no risk-free investments or
guaranteed returns. These kinds of plan
upgrades are ploys to coax victims out of more
money.
8. Broken links, poor spelling, and
bad grammar.
Scam sites generally have short life spans. As
soon as a fraud is discovered, the website will
disappear only to pop up again under a different
brand and web address. This means scam sites
are often put together in a hurry. Criminals will
often use translation software to run their scams
in multiple countries. Be suspicious if you spot
misspelled words, obvious grammatical errors,
odd syntax, or other such mistakes. Likewise,
broken links and pages “under construction,” are
common on scam sites.
9. Winner of so many awards you’ve
never heard of.
Scam sites like to try to build credibility by
showing off awards and trophies that read “Best
Site,” “Customer Satisfaction,” or something
equally generic. If you’ve never heard of the
awards and it’s not clear who gave them, don’t
trust them.
10. Raving testimonials.
Fake testimonials are another way scam
websites try to build trust. Be critical of customer
reviews that appear on the website. Instead, run
a search using the site’s domain name along
with the words “scam,” “fraud,” or “reviews” to
see if previous users have posted warnings.
Also, check websites that detect or track frauds,
like cftc.gov/redlist.
Report suspicious sites:
Visit cftc.gov/redlist to report unregistered
websites offering forex or derivatives trading.
To report fraud, contact:
• The CFTC at cftc.gov/complaint
• The FBI’s Internet Crime Complaint
Center at IC3.gov
• The Securities and Exchange
Commission at
SEC.gov | Report Suspected Securities Fraud or Wrongdoing
• The Federal Trade Commission at
reportfraud.ftc.gov
• Your state regulator, attorney general,
and local law enforcement
Learn more at: cftc.gov/LearnAndProtect
