This Friday, the Austrian Financial Market Authority (FMA) took to the world wide web to warn us poor plebs about the dangers posed by CryptoTrader.
As the regulator did not link to the website belonging to the firm, it’s difficult to know exactly what the company does.
But, if past experience is anything to go by, it’s probably some sort of scam cryptocurrency brokerage.
Such firms have been popping up with increasing regularity over the past couple of years, replacing the now less popular binary options firms that exploded onto the web at the start of this decade.
As with binary options, contracts for difference or foreign exchange scammers, cryptocurrency fraudsters start by convincing you to deposit cash.
Once that’s done, they’ll then let you trade for a bit – perhaps even let you make some money – and then, once you try to withdraw funds, they’ll disappear with your cash forever.
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Cryptocurrency makes this ruse much easier to pull off.
The reason for this is that most cryptocurrencies operate using some sort of anonymous system. For instance, I could transfer bitcoin to someone and not have any idea who they are.
Once the transfer is made, there is also very little I can do to figure out who the person is because their bitcoin address isn’t likely to be connected to a real life person.
Given this state of affairs, it’s unlikely that we’ll see a slowdown in the number of dodgy cryptocurrency brokers operating online. That being said, the downturn in the cryptocurrency market may help slow them down.
In the meantime, expect to see a lot more CryptoTraders pop up on the FMA website’s warning page.