Scam is such a strong word in the world today. Why is that the case? It is because scams run rampant in all corners of the globe and in all sectors where finances are involved. Unfortunately, bad actors are actively working to cheat people and steal their funding as the crypto community has witnessed in recent months.
Digital hackers have stolen millions of dollars’ worth of cryptocurrency, mainly due to weaknesses in particular dApps or in various bridge protocols. Scammers have trolled Twitter and other social apps such as Telegram and Discord, to rob people of their crypto by claiming to be the latest and greatest project, only to end up stealing their ETH.
Are crypto trading bots similar to, or the same as, a hack or a scam? Time to take a moment and dive into this topic a bit deeper.
How to spot a scam
There is a fine line to be drawn between a scam and a legitimate project. What does that line look like? Scams normally are portrayed as something that is too good to be true, or too good to pass up.
If a project is promising the moon, it is time to take a step back and do some more research. Offers for free tokens or large airdrops should be taken with a grain of salt. Legitimate giveaways do exist, but with reputable companies who have a proven track record.
Scams often do not show people’s faces or names who are working on the “project”. If someone cannot be looked up on LinkedIn or Twitter, then that is a big red flag. Use caution when proceeding with these so-called “companies” that don’t reveal their true identities. If they were legitimate, they would have nothing to hide.
Scams can be simple to spot if the email received, or the post read looks “spammy” in nature. If misspellings, grammar issues, or repetitive language exists, most likely it is a scam and should be ignored.
Can a crypto trading bot be a scam?
A crypto trading bot “company” could be a scam, yes. The bots themselves do not have the ability to withdraw funds from a user’s account. Are there bad actors in the crypto trading bot space? As mentioned previously, yes, which is why it is important to perform due diligence when selecting a particular company to set up a trading bot with.
A majority of the bots on the market today are indeed legitimate, with most of them connecting via API to a popular exchange.
How to spot a legitimate crypto trading bot
Potential users of crypto bots are looking for a trust relationship between them and the company they are going to be signing up with. Various ways to spot a bot’s legitimacy could include the following:
- Exchange partnerships
- Customer reviews
- Provable track record
- Performance history
- Faces attached to social proof
The above characteristics will help one in determining the legitimacy of a crypto trading bot company. For example, when looking at Stoic AI, potential investors can clearly see the characteristics on the main website.
Not only is Stoic part of the Binance Partner program, but it also has proven performance in a demonstrable format. Taking it a step further, both the Google Play store and App Store have accepted the bot as worthy for consumers.