An unregulated broker scam involves an individual reaching out to you unsolicited and requesting to become your “investment advisor” or “”trader.” They will often guarantee profits and will request that you only fund your account with cryptocurrencies. Unregulated broker scams are a constant threat in the industry and with every one that gets shutdown a new one seems to pop up.
- Unsolicited cold calls, emails or social media private messages
- Pressure to invest immediately
- Claiming to be part of a regulated or legitimate exchange
- Refer to themselves as an “investment advisor”, “broker” or “”account manager”
- Provide “promotional” offers
- Offer “bonuses” to those who deposit larger amounts
- Do not allow you to fund your account directly. They will instruct you to create an account with a regulated exchange and transfer your crypto to their account.
- Demand you to pay a “tax”, “fee”, or “commission” to withdraw your profits
- Will require the use of Remote Access Software
- Unable to explain how they got your contact information.
How to protect yourself
The best way to protect yourself is to educate yourself on how they work. You should be cautious of too-good-to-be-true promotions and promises to get rich quick. Once you send crypto to the firm, there is no way of retrieving it unless they send it back, which is highly unlikely.
A checklist to avoid unregulated brokers:
- Stick with well-known and popular exchanges
- Put the company’s name + “scam” into Google to find results regarding the company’s legitimacy
- Look out for complaints about not being able to withdraw funds
- Determine where the company is registered and if there are any reliable reviews confirming it’s the real address of the company
- Get information about fees and rates upfront and in writing
- Don’t feel pressured to transfer your crypto to the exchange
- Be extra cautious with people claiming to be “Blockchain Recovery Experts” who claim they can retrieve your stolen funds
If you need to report an incident or you have fallen victim to this type of scam, reach out to our Live Chat support or submit a request at firstname.lastname@example.org.
Additional resources for reporting and learning about fraud: