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Article published at

https://www.baltictimes.com/understanding_the_factors_influencing_cryptocurrency_prices/

Pump and dump scams – Can a safe crypto exchange help you avoid them?

Cryptocurrencies have gained immense popularity in recent years, offering people new and exciting opportunities. However, with the rise in popularity, there has also been an increase in fraudulent activities within the crypto space, including pump and dump scams.

In this article, we will explore what pump-and-dump scams are and provide a basic guide on how to avoid them. We’ll also highlight how using a safe crypto exchange can be a crucial step in protecting your assets.

Understanding pump and dump scams

Pump and dump scams are deceptive practices in the world of cryptocurrencies. Here’s how they typically work:

  • The Pump: A group of individuals or entities artificially inflates the price of a specific cryptocurrency. They do this by spreading positive rumors, engaging in aggressive marketing, and creating a sense of urgency among people.
  • The Dump: Once the price has been artificially pumped up and attracted a large number of unsuspecting individuals, the perpetrators sell off their holdings at the inflated prices, causing the price to plummet rapidly.

How using a safe crypto exchange can help

One of the most effective ways to avoid falling victim to pump and dump scams is by using a safe crypto exchange. These entities prioritize the listing of reliable crypto projects and adhere to stringent rules, making them a safer choice for customers.

Safe crypto exchanges, such as our exchange at Bintense, have a rigorous vetting process for listing cryptocurrencies. We conduct thorough due diligence, assessing factors like the project’s team, technology, use case, and community support, before we expose it to our clients.

By listing only legitimate projects, reliable exchanges can reduce the likelihood of pump and dump schemes taking place on their platform. In fact, many exchanges actively work to detect and prevent such scams, protecting their users.

How to avoid pump and dump scams

  1. Research: Before buying any cryptocurrency, do your research. Understand the project, its technology, and its real-world use case. Safe crypto exchanges often provide detailed information about listed projects, which can help you make informed decisions.
  1. Avoid Hype: Be wary of cryptocurrencies that are heavily hyped with promises of guaranteed high returns. If something sounds too good to be true, it probably is.
  1. Stay Informed: Keep yourself updated with the latest news and developments in the cryptocurrency space. This will help you spot unusual price movements and suspicious activities.
  1. Exercise Caution: Don’t succumb to FOMO (Fear of Missing Out). Even if a cryptocurrency is experiencing a rapid price increase, it’s essential to remain cautious and not rush to buy it without thorough research.

In conclusion, pump and dump scams are a prevalent threat in the crypto world, but by following a few simple guidelines, you can reduce your risk of falling victim to them. Utilizing a safe crypto exchange, which lists only reliable crypto projects, is a fundamental step in safeguarding your crypto holding. We at Bintense recommend that you always do your research, stay informed, and exercise caution when navigating the exciting but volatile world of cryptocurrencies.

Bintense is a powerful and utterly safe crypto exchange platform.

This website and its content have been produced and disseminated for persons outside of the United Kingdom. The information provided is not directed at or intended for distribution to, or use by, any person or entity located within the UK. The financial products and services mentioned on this website are not eligible for the UK. Cryptoassets are classified as Restricted Mass Market Investments in the UK, meaning that they are high-risk investments and are not suitable for most retail investors

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  • This website is not intended for a UK audience. If you are accessing this website from the UK, please exit this site immediately.

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1. You could lose all the money you invest.

  • The performance of most crypto assets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.
  • The cryptoasset market is largely unregulated. There is a risk of losing money or any crypto assets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

2. You should not expect to be protected if something goes wrong. 

  • The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here: https://www.fscs.org.uk/check/investmentprotection-checker. 
  • The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here: https://www.financialombudsman.org.uk/consumers.

3. You may be unable to sell your investment when you want.

  • There is no guarantee that investments in crypto assets can be easily sold at any given time. The ability to sell a crypto asset depends on various factors, including the supply and demand in the market at that time.
  • Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delays, and you may be unable to sell your crypto assets when you want.

4. Crypto asset investments can be complex.

  • Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment.
  • You should do your own research before investing. If something sounds too good to be true, it probably is.

5. Don’t put all your eggs in one basket.

Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on anyone to do well.

A good rule of thumb is not to invest more than 10% of your money in high-risk investments: https://www.fca.org.uk/investsmart/5questions-ask-you-invest.

If you want to learn more about protecting yourself, visit the FCA’s website here: https://www.fca.org.uk/investsmart.

For further information about cryptoassets, visit the FCA’s website here: https://www.fca.org.uk/investsmart/crypto-basics.