The Scam of a Country — How to Avoid Bitcoin Trading Scams

Everyday in Kenya, a person is conned. I haven’t met a Nairobian who hasn’t been conned. There’s an informal believe that you have to be conned to be welcome in the City.
There was quails (this one was big), M-PESA scams, prize scams especially through Equity bank, street scams (remember that guy who could pray and multiply your money), online dating scams (that new friend request you accepted and now they’re asking for money), fake rental listings, property investment scams (remember the greenhouses), WhatsApp scams, online shopping scams and many more.
Enter cryptocurrency trading scams.
Many people have little or no knowledge of cryptocurrency, and this is a big benefit to many scammers. It started with crypto investment scams. You could deposit some money to some crypto investment scheme and be earning large chunks of cash on a daily basis — remember you could only make withdrawals on Sundays! I remember one friend who was convinced to join one such scheme. The word was ‘guaranteed profits.’ The poor guy took a loan from the SACCO to finance his honest greed. The company would eventually disappear with his sweet cash. Now he’s paying for a loan he didn’t need to take.
In layman definition, A cryptocurrency is a type of currency which uses digital files as money. Usually, the files are created using the same methods as cryptography (the science of hiding information). Digital signatures can be used to keep the transactions secure, and let other people check that the transactions are real. Simply put, cryptocurrency is money in a digital form. Contrast this with the wads of cash you carry around physically. In crypto, the cash is held in a digital secured wallet.
Bitcoin is the new darling of the trading industry and everybody wants a piece of it (even a small piece will do) so let’s see how to trade it while avoiding scams — because there are LOTS of scams.The new wave in digital scams involves cryptocurrency/bitcoin trading. These are the top Bitcoin scams (Bitcoin is the leading Cryptocurrency).
- Fake Bitcoin Exchanges
- Ponzi Schemes (Recognizing a ponzi scheme should be in your gut). If the deal is too good, you know what to do. A common phrase I like using is, “No one will ever create a product/service that makes money for you. He could have used it to make money for himself.”
- Fake Cryptocurrencies/Fake ICOs
- Cloud Mining schemes
- Multi-level marketing — One major company that has been repeatedly outed is OneCoin, whose owners were implicated in several other shady operations.
- Old school scams
- Malware
- Fake Brokers — Only trade Forex and CFDs on stock indices, commodities, stocks, metals and energies with a licensed and regulated broker.
EGM Securities is Kenya’s only online Forex trading and CFD broker Licensed by Capital Markets Authority (CMA).
There are 6 things to consider when choosing a Forex broker according to Babypips.com.
- Security — Checking the credibility of a Forex broker isn’t very hard. There are regulatory agencies all over the world that separate the trustworthy from the fraudulent. In Kenya, check with the Capital markets Authority. Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies. Others are;
United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
Australia: Australian Securities and Investment Commission (ASIC)
Switzerland: Swiss Federal Banking Commission (SFBC)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
France: Autorité des Marchés Financiers (AMF)
Canada: Investment Information Regulatory Organization of Canada (IIROC)
2. Transaction Costs
3. Deposit and Withdrawal — Good FX brokers will allow you to deposit funds and withdraw your earnings hassle-free.
4. Trading Platform
5. Execution
6. Customer Service
Always do due diligence before planning of investing your money.
Don’t get conned today, will you?