How to Check a Cryptocurrency Exchanger for Fraud

A cryptocurrency exchange scam is a fraudulent platform created to deceive users. It may look like a regular cryptocurrency exchange site, offer attractive rates, or promise fast transaction processing. However, instead of providing an exchange service, such platforms steal users' funds. One of the main features of scam exchangers is the lack of a refund option, since cryptocurrency transactions are irreversible.

Scammers use various schemes to attract users, including:

Some of these platforms can operate for a long time without suspicion, which makes them especially dangerous. Users who are new to cryptocurrency are most vulnerable to these fraudulent schemes.

The fraud scheme itself may vary. In our practice, we have encountered various cases, such as accepting funds for exchange and non-payment by the “exchanger”, pseudo AML check or blocking for the solution of which it is necessary to make a repeat payment, the need to pay a “tax” under the pretext of “important legal documents”, etc.

Checking a cryptocurrency exchanger for fraud is the first step to protecting your funds and data when deciding to interact with such a service. Not everyone can easily recognize a scam, so knowing the basic verification methods will help avoid unpleasant situations.

Earlier, we published an article on how to recognize a fraudulent crypto project. Many of its points are also suitable for fake exchangers.

Method 1: Study reviews and ratings

The first and most popular way to check is to study reviews on independent platforms. Sites such as Trustpilot, Reddit, Bitcointalk allow users to share their real experience of interacting with a particular exchanger. If the exchanger regularly receives negative reviews about the loss of funds or that users cannot withdraw their money, this is a serious signal that the platform may be fraudulent. A complete lack of reviews should also raise doubts about the reliability of such a service.

It is also worth considering not only the number of reviews, but also their nature. If all the reviews look too positive and uniform, this may indicate falsification of data.

In addition, using search engines where you can enter the name and website of the exchanger can also be extremely useful. It is quite possible that someone has already encountered these scammers and left their review on a forum or social network.

Method 2: Checking licenses and legal information

The next step is to check if the exchanger has licenses and other documents confirming the legitimacy of its work. Licensed exchangers are required to comply with strict regulatory requirements, such as compliance with anti-money laundering (AML) rules and mandatory customer identification (KYC). These measures reduce the risk that the exchanger is involved in illegal activities.

Look for documents such as a user agreement, privacy policy, AML/KYC policy. But the mere presence of such documents does not guarantee security; they must necessarily indicate the legal entity of the company. It can be checked and if all the data matches, the likelihood of fraud is significantly reduced.

Licenses can be checked on the official websites of regulators, such as FinCEN in the USA or FCA in the UK.

Another important aspect is the transparency of the exchanger team and/or contact information. Reliable platforms always publish information about their team and partners, which allows you to check their reputation, as well as their contacts on various issues to receive feedback from them.

Method 3: Blockchain transaction analysis

This method is rarely used by beginners, but it is one of the most effective methods for detecting scam exchangers. Platforms such as Btrace and Bholder from AML Crypto allow you to track transactions associated with a particular exchanger and identify suspicious operations. Since all transactions are transparent on the blockchain, you can find out which cryptocurrency addresses are associated with fraudulent activities and what assets they operate with.

It is not uncommon for scam exchangers to send funds to addresses that are already blacklisted or are part of a chain of transactions associated with previous scams. Transaction analysis helps to identify such connections and prevent the loss of funds.

Example: a user decided to check the exchanger's transactions through a blockchain analytics tool and discovered that the funds sent to his wallet were later transferred to addresses associated with cybercrime. This helped him to refuse further cooperation with this platform in time and save his funds.

If you have become a victim of fraud in an exchanger, you need to immediately take steps to protect your funds. First of all, save all information about the transaction: transaction hashes, correspondence with support, website address, wallet addresses and other data. The more information you can provide, the higher the likelihood of a successful investigation.

The company AML Crypto specializes in investigating cryptocurrency crimes and offers services for finding and returning stolen funds. Our team of experts uses modern tools to track suspicious transactions, analyze the blockchain and interact with law enforcement agencies. We have extensive experience in such cases and are ready to help you in case of a scam.

If you have encountered fraud in an exchanger, contact us via Telegram or contact our managers on the website. We will promptly conduct an investigation and provide you with full information on further steps. Cooperation with us is your chance to return lost assets and punish the perpetrators.