Coinbaza – What Makes it a Scam Broker?

Coinbaza

Interested in trading cryptocurrencies? You are not alone, as cryptocurrencies have generated a lot of buzz and this has piqued the interest of many in this space. There have been a number of stories of people making big fortunes through crypto and it has driven others to also try and get a piece of this lucrative pie. However, there have also been other stories, those of crypto scams. This Coinbaza review is meant to shine the light on one way these scams are being carried out in the crypto market.

The crypto market has become a hotspot scams due to a number of reasons, such as the absence of regulation, the lack of knowledge and understanding about the assets in general and the FOMO (fear of missing out) that people have. Crypto scams are happening in a variety of ways, such as in the form of shady exchanges, fake DeFi protocols and most of all, fraudulent crypto brokers. Therefore, you have to exercise caution when you decide to engage in crypto trading.

It is undoubtedly exciting to think of the prospect of making money in the crypto market, but you should not let this excitement push you into making decisions in a hurry. You will find plenty of stories of people who did just that and ended up with the wrong brokerage that conned them out of their money. Unless you want to have the same experience, it is best to play it smart and go over your options carefully to know what you are committing to. While it is true that a brokerage will not warn you about its true nature, there are some signs that can help you figure out the truth.

You can do the same with Coinbaza, a brokerage that is offering crypto CFDs to help people in joining the crypto trend. It claims to be a registered company and makes a number of other promises that will definitely intrigue you. But, you can find plenty of signs that show it is a scam broker. What are they? You can take a look at them below:

Licensing and regulation

Before you open an account with an online broker, your priority should be to take a look at their licensing and regulation. It is because this can help you figure out if you are dealing with a legitimate brokerage or not. A genuine company does not have a problem with getting a license for providing their services in the jurisdiction they are operating in. Moreover, when you deal with a regulated firm, you can rest assured that they will provide you services of the highest standard, comply with laws and also offer safety of funds.

In addition, the chances of getting scam are also low in the case of a licensed and regulated company because they are monitored by a third-party organization. Where does Coinbaza stand in this regard? A look at their website shows that they claim to be registered in Birmingham, England. It order to be registered in the United Kingdom, the company would need to have a license from the Financial Conduct Authority (FCA).

This is the regulatory body of the UK and one of the renowned ones in the world because of its strict policies and requirements. The trouble is that even if you search the online register of the FCA to look for Coinbaza, you can rest assured that you cannot find it. This is because the FCA has imposed a ban on crypto CFDs due to the risk involved, so they cannot be offered in the UK altogether. Thus, it is just not possible for Coinbaza to operate there at all, much less with the permission of the FCA.

It indicates that Coinbaza is clearly lying about where it is operating from, or it is an illegal firm and both these situations show that you are dealing with a scam brokerage.

Trading software

The next important aspect of a broker that you need to look at before signing up with them is the trading software. This will help you connect to the crypto market and execute your trades, so you want a software that boasts state-of-the-art trading tools and functionalities that can help you in making profitable trades. Bear in mind that the trading software you use plays an important role in your success, due to which people prefer to use professional solutions like the MT5.

This is known as the most powerful and innovative trading platform in the market and is offered by every legitimate brokerage. Unfortunately, you will not find this available at Coinbaza because they are not in it for the long term. They have just added an oversimplified web trading platform for furthering their ruse and nothing more. This is because the platform is severely lacking in terms of tools and automated trading and is not even suitable for beginner traders in the long run.

Excessive leverage

Cryptocurrencies have become renowned for their extreme volatility and unpredictability. Considering that they are already very volatile, it means that you need to keep the use of leverage in check because it can result in hefty losses. Therefore, leverage ratios for crypto assets are not that high, but Coinbaza appears to be offering 5x leverage to its clients. This is shockingly high and another sign of a scam because the broker is trying to lure people to its platform by offering such excessive ratios.

Only crypto deposits

Another obvious sign that Coinbaza is nothing more than a scam is that it only asks for crypto deposits. Legitimate companies would always give you several options to choose from, but here you are only given the option of crypto payments because they are final and do not offer the possibility of chargeback.

This means that there will be no refunds for you if you believe you have been scammed and as crypto payments also offer anonymity, it is easy for fraudsters like Coinbaza to cover their tracks.

Wrapping Up

All of these are signs that you are dealing with a hoax where Coinbaza is concerned and you should abandon this option altogether.