How Forex and Cryptocurrency Scams Work, Overview and Factual Examination

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How Forex and Cryptocurrency Scams Work, Overview and Factual Examination

Posted on by Patrick Jones

If you have ever asked yourself how do all these cryptocurrency and Forex scams really work and who is making the money at the end of the day, then we have prepared a special investigative report for you. Let’s start off with an overview about what is going on in the get-rich-quick scheme scene, and which scams are the most viral. In general, binary options are almost completely dead due to regulation and crackdowns of Interpol, the SEC, and local police which have arrested various white collar criminals in the upper echelon of this niche. One of the most known scammers is name Mike Shah and his company ZilMil Inc. He was recently arrested along with co-conspirator  Jason B. Scharf of Citrades for illegally acting as Futures Commission Merchants and Commodity Trading Advisors without having the proper certification. The latter was also charged with illegally soliciting over $16 million in binary options contracts. In this context, you should know that Shah was acting as the affiliate marketer who was delivering paying customers, and Scharf was acting as the broker.

In light of these developments (and others), the crooks in the industry have decided to shift their focus from Binary Options to Forex, and cryptocurrencies. Now, Forex has been around for a long time and that’s not going to change, but what we are seeing here is a more aggressive transition from more traditional or legitimate Forex, to a more fraudulent and deceptive type of customer acquisition model. To put it simply, the same binary options crooks are now using EXACTLY the same tactics, only funneling in traders to Forex, CFD, and cryptocurrency brokers.

Now cryptocurrencies are a perfect fit for this lot, and if you ask them they will tell you straight up without being shy about it. “Yes, they closed the door so we sneaked in through the window”. This means they simply adapted to the new situation and partnered with scam Forex brokers instead of Binary Options brokers. Interestingly enough, the crypto scene draws a large crowd of inexperienced and untrained opportunity seekers. Most people who read the news or various updates about cryptocurrencies tend to get intrigued, but don’t really understand how to get started in this niche. That’s when the scammers enter the picture, and they know exactly what to say and who to approach.

Cryptocurrency scams are divided into certain groups. The first group or type, and the one we usually focus on here at Binary Scam Alerts is the fake automated trading systems and get-rich-quick scams. The rest are fake ICO’s, Ponzi Schemes, Fake Faucets, Pyramid Schemes, and various MLM or Multi Level Marketing scams. When it comes to the fake apps, the info-graphic here describes how the scams operate and what the process is.

In many ways the “trading floors” for such operations resemble a boiler room where salesmen use pressure tactics to lure potential customers into investing or buying fraudulent contracts or securities. But it all starts with understanding how customers are targeted in the first place and then baited to join a program.

Now, online marketers understand trends and how to use a very powerful motive in order to get you to signup to their systems. That motive is called GREED, but it can also be financial distress. Either way, we are talking about money and how to obtain it in an easy and relatively fast way so that you can alleviate your financial pressures and live life the way its really meant to be lived. This is a very powerful governing motif, and it is always present to some degree or another in any scam you will signup for.

Types of Financial Scams and Common Fraud Schemes
We will be focusing on financial scams having to do with referral schemes and offshore Forex, CFDs, and Cryptocurrency brokers. Firstly, its interesting and worth pointing out that these financial scams do not necessarily target the well-off or wealthy individuals. In fact, in most cases it is the less affluent and even broke customers are targeted. This is because they are more vulnerable, less informed and connected, but also more distressed and in need of an immediate cure or remedy to their financial problems.

The Fake Signals App
The fake signals software is designed to be perceived as a professional EA or expert advisor. In reality, the software behind it are random at best an most likely set to lose. That is because the person who is offering you this bogus signals app makes money when you lose your investment.

Fraudulent Crypto Robot Or Automated Trading Systems
These are probably the second most prevalent types of fake software. Much similar to the fake signals app, this system is designed to drain your money on autopilot. You will most likely be tempted to signup via fake ads or SPAM email communication. Crypto Robot 365 and Binary Robot 365 are good examples of how a fake crypto robot looks and behaves like.

Get Rich Quick Schemes
The “make a fast buck” type of system, more commonly referred to by industry professionals as “make money online” or MMO, is by far the most prevalent and recurring type of financial scam. It preys on the weaker segments of society, and after you signup the scam brokers will contact you via phone and try to get more money out of you.

These are basically the three types of scams that we deal with here at Binary Scam Alerts. The scams that are now being promoted most aggressively via affiliate networks are Bitcoin Trader, Bitcoin Loophole and Bitcoin Code which is also known as “Bitcoin Wealth”.

Communication Channels
The first way for scammers to reach out is via telephone. Sales agents receive contact lists (many times stolen) and those are automatically fed into a dial up machine. If you pick up the phone an agent is automatically assigned to you and that is where they start to lay it on thick. If that doesn’t work, get ready to be spammed, and it wont stop.

Identity Theft and Credit Card Fraud
Sometimes (not always) your identity may be sold off to third parties, along with your credit card information. Don’t be surprised if you suddenly get overcharged or alternatively charged for something you never purchased.

Rigged Trading Environment
The trading software itself is rigged both on the broker side, as well on the collateral software which was used in the first place. Its quite easy to pick up on this when you look at the data tickers and market information. You will see a severe discrepancy and very big leverage on the contract rates.

The Tell Signs and Red Flags
The first and most obvious one has to do with exaggerated or hyped up claims of easy money. If you hear that, run away. But then we have fake testimonials, inflated bank accounts, and outright lies or unconfirmed facts.

How To Avoid Getting Scammed
Firstly you need to detect it, and that is what our article has explained in detail. Secondly, you need to fight the urge to try out something you already suspect is shady. Sometimes its hard to withstand the appeal of something which can potentially be so lucrative, but you have to get smart and just move on. If you are unsure or suspect you might be getting duped then simply contact us by leaving a message below and we shall do our utmost to assist you. Alternatively, you can leave a message in our “report a scam” section. We can also be contacted via our our our Facebook Group , Google +Pinterest, and YouTube Channel

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About Patrick Jones

Exposing financial scams since 2015 on a daily basis. Patrick has an academic background in Journalism and a knack for delivering snappy and relevant reviews. View all posts by Patrick Jones →