Binance is the world's largest cryptocurrency exchange. Because Binance has achieved this status and enjoys a high level of trust among consumers, scammers take advantage of the exchange's reputation. In essence, there is no Binance fraud, as the exchange offers a legitimate business. Another issue is the problems that Binance faces with various regulatory authorities. However, these problems have nothing to do with Binance fraud but rather represent a separate issue Binance fraud but rather represent a separate issue.
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In the following, we will show how Binance fraud works and how you can protect yourself from it. We will also explore options for taking action if you have been scammed.
How does Binance fraud work?
Many scammers simply invent brokers and exchanges. On these fraudulent platforms, customers are then exploited. In many cases, Binance fraud involves a similar tactic in which the perpetrators do not create a new company but rather capitalize on the name of Binance.
They typically create websites that closely resemble the official Binance.com website. Once the hard part of the work is done, the scammers only need to find suitable victims. This can happen through various methods:
- Phishing: Scammers send out a large number of emails, pretending to be Binance support staff, for example. If the victim falls for one of these emails, they will be redirected to the fraudulent website where the actual fraud takes place.
- Internet advertising: Scammers use various channels for this method. They place ads on platforms like Google, as well as on social media platforms such as Facebook, Instagram, or Twitter. Advertisements on reputable publications like Bild.de or Spiegel are also popular. While the fraudulent ads are often discovered and taken down quickly, they benefit from the large reach within that short period. Since the perpetrators can repeatedly publish new ads through loopholes, they continue to lure victims into their trap using this method.
- Chat programs: Another method is direct contact with the victim. Random individuals are approached via messaging programs like Telegram, WhatsApp, or SMS. The scammers usually try to establish personal contact and may invest a considerable amount of time. Often, they chat with the victims for days on end before eventually getting to the point. The conversation is frequently shifted towards investments. Instead of engaging in casual discussions about investments, the victim is lured into the fraudulent platform.
Regardless of the method used to lure the victim to the platform, the scammers have one ultimate goal: to steal a significant amount of money. Depending on how the fraudulent platform is set up, the scammers have a range of technical options available to them. Often, victims are led to believe they need to deposit money to purchase cryptocurrencies.
However, these cryptocurrencies are only credited to the supposed customer account on the platform. In reality, the fraudulent broker does not acquire any cryptocurrencies. If the victim invests in good faith and leaves the supposedly purchased cryptocurrencies on the platform, they may not realize that a crime has been committed for a long time.
Broker Fraud: Alleged profits are generated on Binance
Another scam aims not to direct victims to a fraudulent platform but rather to simulate asset management. Victims actually create real accounts on Binance.com and provide the scammers with access. This can happen through the disclosure of login credentials or by creating an API key.
By doing so, the scammers secure full access to the account and can not only trade on Binance but also siphon off assets, depending on the granted permissions. The perpetrators may take their time and genuinely help the victim for a while. The objective is to build trust in order to establish a foundation for increasingly higher deposits. Once it becomes clear that no more funds can be gained or the perpetrators are satisfied with the accumulated assets, they empty the Binance account.
They generally prefer cryptocurrencies to convert them into the respective local currency on other exchanges.
How can you protect yourself from Binance fraud?
The best protection is a healthy skepticism towards strangers who bring up the topic of money and with whom you only have contact through the internet. Unsolicited text messages via messaging programs are particularly popular because they allow the perpetrators to sell and distribute their fraud effectively.
In personal contact, objections from the victim can be directly countered, and psychological pressure can also be applied. In general, it is advisable to refrain from having casual conversations with strangers and to end them as soon as the topic of money suddenly comes up.
If you are genuinely interested in purchasing cryptocurrencies, always make sure that you are visiting the correct website, Binance.com. The website can be verified, for example, through the website's certificate in the browser. If you unexpectedly receive an email from customer support urging you to take action and log in to your account or move funds, you should be skeptical. Such emails are designed to create pressure and typically contain phishing links. Instead, it is recommended to manually access the website through the browser and verify that you are on the correct site. After that, you can log in and then contact customer support. This ensures that you are speaking to the correct recipient and not inadvertently contacting scammers.
Fraudulent internet advertisements using the name of Binance, on the other hand, are more difficult to identify. They can appear on various social media platforms or websites, which further reinforces the impression that it is a legitimate offer. Here, too, it is recommended to independently verify the offer of an advertisement by visiting verified Binance social media channels or manually accessing the website.
Does Binance fraud have anything to do with the SEC?
The US Securities and Exchange Commission (SEC) filed a lawsuit against Binance in June 2023. The allegations by the US financial regulatory authority are very serious and primarily concern Binance's US platform. They involve money laundering, market manipulation, and fraud.
It is important to note that these allegations have not yet been confirmed by a court judgment. Furthermore, Binance denies the SEC's accusations. It leaves a bitter taste that the world's largest cryptocurrency exchange is facing such serious allegations. However, Binance customers do not need to fear that they have been defrauded of their money. So far, there is no evidence that customers have been unable to withdraw their funds or cryptocurrencies from Binance.com or the US platform.
Considering the severe crises that shook the crypto market in 2022, it is understandable for investors to withdraw their cryptocurrencies and funds from Binance.com. After all, the principle is that caution is better than regret. However, these considerations have nothing to do with the Binance fraud that we are currently experiencing in many cases. Neither the company nor the legal proceedings of the SEC or the CFTC are connected to it.
I have been defrauded, what can I do?
If you have been a victim of fraud, you should first remain calm and avoid acting impulsively. On the one hand, hasty actions can destroy evidence, and on the other hand, you could also alert the perpetrators. Here is a list of things you should definitely do:
- Engage an attorney: Crypto-Tracing works closely with attorney Dr. Marc Maisch, who has experience in IT law and expertise in crypto fraud. Mr. Maisch can advise and legally support you through all stages of the process. He can also initiate civil lawsuits against the perpetrators or third parties if they are liable for damages.
- Blockchain forensics: If cryptocurrencies are involved, Crypto-Tracing can trace the digital trail of the perpetrators. Through blockchain forensics, we can make the transactions between the perpetrator and the victim visible and potentially determine what they have done with their loot.
- File a criminal complaint: The only way to track down the perpetrators and recover the money is to file a criminal complaint with the local police authorities. Crypto-Tracing offers significant support to its clients in this regard.
- Preserve evidence: To succeed with the criminal complaint, appropriate evidence must be collected and handed over to the police. All communication with the perpetrators should be saved. This includes chat logs, emails, or writing memorandums regarding personal conversations with the perpetrators. Here, too, Crypto-Tracing can take action and achieve better results due to its many years of experience compared to a layperson.
- Contact customer service: Binance can assist in investigating the crime and cooperate with the authorities. In certain cases, refunds through Binance may also be possible.
Do not hesitate and contact us today. The longer the time between the crime and the initiation of investigations, the lower the chances of success. Time is of the essence. Crypto-Tracing supports you in all necessary steps and makes the perpetrators' traces visible through blockchain forensics.
FAQ about Binance fraud
How can you protect your funds on Binance?
You can protect your funds on Binance by using a secure password combination, enabling two-factor authentication (2FA), and immediately reporting any suspicious activities. Additionally, you should not grant access to your account or its API keys to third parties.
How can you protect yourself from fraudulent apps that copy Binance?
Make sure to only download apps from official app stores. Check the developer information and reviews to ensure that you are downloading the genuine Binance app.
What should you do if you suspect suspicious activity on your Binance account?
Change your account password and enable two-factor authentication (2FA) if you haven't done so already. Contact Binance customer support and report the suspicious activity. Provide all necessary information and cooperate with Binance's security team to resolve the issue.