- It might be risky to put money on brand-new cryptocurrency exchanges.
- It is better to invest inthe long-term and well established cryptocurrencies.
- Binance CEO has been on admission to convince users that Binace is not like FTX.
In light of a recent Reddit thread, it seems that new cryptocurrency exchange platforms shouldn’t be trusted by investors because they might be stealing their money. Owners of exchange platforms can use it to buy their own fake tokens, making the system extremely dubious.
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Surprisingly, the tokens don’t amount to much, and you’d be better off investing in more well-established cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). It is especially important for people to be cautious now and not waste their money on counterfeit tokens or coins.
Investors and traders looking to avoid this type of fraudulent activity should prioritize using decentralized exchanges (Uniswap), though they are free to use any centralized exchange like Kraken so as long as it does not issue its own token and does not engage in such questionable business practices.
In other reports, Binance CEO Chanpeng Zhao (“CZ”), like other exchange leaders, has been on a mission to convince users for over a month that Binance is fundamentally different from FTX, the SBF-led exchange that went bankrupt due to the misuse of user funds.
However, unlike FTX, Binance lacks significant oversight, and not everyone is convinced by CZ’s repeated claims of integrity. In the past week, users have been making record withdrawals from the Binance exchange due to concerns over the security of their funds following a sloppy audit of the exchange’s reserves and subsequent reports of criminal investigations into the exchange’s executives.
Because of the high risk of fraud during this transition period, potential investors in cryptocurrency exchanges should conduct their own due diligence on the crypto companies before committing any funds.
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