Even though cryptocurrencies have had a wild run during the past couple of years – especially major altcoins like Bitcoin and Ripple – and they have properly established themselves with regard to the wider public, there is still a long way to go for the crypto market to become truly mainstream. Crypto scams keep springing up here and there – and this could seriously impact those looking to invest into XRP.
Online Crypto Scams on the Rise
When an industry is overloaded with scams, this usually translates into two opposite tendencies. On the one hand, it undermines investors’ faith in the market; on the other, it means that the industry is doing really well and that it is perceived as an upward market. This makes it a prime opportunity for fraudsters to try and cash in on that interest.
That is pretty straightforward: the more investors are interested in Ripple, the more lucrative it will be for cyber criminals to pose as legitimate sellers. This rising trend of scammers looking to deceive investors means that if you are looking to buy Ripple, it is all the more important to make sure that you have chosen a trustworthy exchange that provides adequate safeguards and where all transactions are made with complete security. Choosing a licensed and reliable broker that is FCA regulated can go a long way towards protecting your interests.
Even though in some cases the fraud is relatively easy to spot, many fall victim every day. The scams usually work through malicious ad banners that pop up and encourage potential investors to make exchanges through a fraudulent site. And it seems that online scams involving crypto coins are very popular among cyber fraudsters. Data shows that investors were defrauded in more than $1.7 billion in cryptocurrencies through online scams and hacks between 2011 and 2018 – and 40% of that, which translates roughly to $670 million, was lost during Q1 2018. This rise is in large part due to the popularity spike and growth of the crypto investment market.
Only recently the Financial Services and Markets Authority in Belgium chose to add a further 28 scam sites on its list of fraudulent sites that investors should not use. The list includes sites such as:
- bitc-international.com
- crypto-acces.com
- cryptowallet24.com
- emarketstrade.com
- wallet-coins.com
The Belgian authority started compiling the list in February in order to help support investors in making safe choices when buying or selling XRP and other digital currencies. More and more regulators and authorities are looking into online scams involving cryptocurrencies and looking for ways to protect investors, as interest in altcoins continues to rise.
How Could Crypto Scams Affect XRP?
The crypto market is still far from stable and many digital coins like BTC have been criticized for their volatility and wild fluctuation in price. This lack of stability means flexibility that is extremely valued by some investors, but also means that price momentum is unduly influenced by factors external to the market. If XRP scams were to become commonplace, this could drive new investors away and make XRP holders suffer. It also will inevitably lead to more regulation of the crypto trading industry, which has its advantages and disadvantages. Ripple has shown in the past that it can work with increased regulation – and this has helped its price increase – so authorities clamping down to make the landscape clearer should not be a problem for XRP. Ripple CEO Brad Garlinghouse has come out in favor of increased regulation before, applauding governments across the globe for stepping in to protect investors from potentially fraudulent ICOs.
If regulatory control increases due to the pervasiveness of crypto scams, then Ripple could find itself in a favourable position. Although its founders have been inspired by the same vision for decentralized power as other cryptocurrencies like BTC, the digital coin has always worked closely with authorities and major stakeholders like banks. This means it has developed the know-how to respond to regulatory requirements and foster compliance – which could prove positive for XRP investors in the long run.