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Table of Contents
1. The core functions of the exchange
2. Characteristics of formal exchanges
3. Common methods of scam exchanges
Identify key points
5. Risk warning
Home web3.0 What is the exchange doing? Is it a scam?

What is the exchange doing? Is it a scam?

Jul 22, 2025 pm 08:24 PM
Bitcoin cryptocurrency exchange Altcoins cryptocurrency trading

The exchange is a formal platform that provides financial asset trading services. Its core functions are: 1. Match orders between buyers and sellers; 2. Ensure transparent and fair prices; 3. Implement third-party custody of assets. The characteristics of formal exchanges include: licensed operation, sufficient information disclosure, and a risk control mechanism. Common scam methods: 1. Scam in the capital market, promise high returns to limit withdrawals; 2. False transactions, tamper with data or manipulate prices; 3. Use offshore companies to evade supervision. The key points of identification are: find out whether the funds are subject to authoritative supervision, whether the funds are custodianized, and inspect the time and background of the establishment of the platform. Investors should give priority to strong regulatory platforms to avoid falling into the trap of illegal trading.

What does the exchange do? Is it a scam? - php Chinese

The exchange is a formal platform that provides financial asset trading services, and its main functions include matching buyers and sellers, providing liquidity, price discovery, etc. Common types include stock exchanges (stocks, bonds), cryptocurrency exchanges (bitcoin, etc.), commodity exchanges (gold, crude oil), etc. The following is a detailed analysis of the exchange:

1. The core functions of the exchange

  1. Matching transactions: Matching buyer and seller orders through electronic systems.

  2. Price transparency: The public quotation mechanism ensures market fairness.

  3. Asset custody: Regular exchanges are regulated and require third parties to deposit funds.

2. Characteristics of formal exchanges

  • Licensed operations: must obtain approval from the China Securities Regulatory Commission, the central bank and other institutions (such as the Shanghai Stock Exchange and Nasdaq).

  • Information disclosure: Listed companies need to disclose financial reports regularly and exchanges publicly traded data.

  • Risk control measures: There are limit-ups, circuit breakers, etc.

3. Common methods of scam exchanges

  1. Funding Scam:

    • Commit high returns (such as "daily earnings 5%").

    • Restrict cash withdrawals and use new user funds to pay for old users.

    • Case: The "Pton Foreign Exchange" collapsed in 2017, involving more than 100 billion yuan.

  2. False transactions:

    • The background tampers with the K-line chart (some altcoin exchanges).

    • Artificially manipulate prices (such as "pig killing" stock recommendations).

  3. Regulatory arbitrage:

    • Registering an offshore company and claiming that "holding a license in a certain country" is actually unregulated.

Identify key points

  • Inspection and supervision: There are only 8 legal exchanges in China (including the Shanghai Stock Exchange and Shenzhen Stock Exchange).

  • Look at funds: funds on the formal platform are escrowed through banks and are not included in the company's account.

  • History test: The establishment time is short (

5. Risk warning

Data from the International Organization of Securities Regulatory Commission (IOSCO) in 2023 shows that about 34% of cryptocurrency exchanges around the world have abnormal trading behavior. However, the fraud rate on traditional stock exchanges is less than 0.01%, and the key difference lies in the intensity of supervision.

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