Business Conduct Risk

Good cryptocurrency companies are open and clear about their operations, including details about products, fees, and how your funds are managed. If a company’s communication is vague or unclear, it may be a warning sign that they’re not prioritizing your best interests. 

Reliable platforms focus on responsible business practices, strong internal controls, and complying with regulations designed to protect customers. They prioritize long-term trust and stability over short-term marketing hype or quick gains. 

The crypto market can sometimes be exposed to unethical activities, such as: 

• Pump and dump schemes: Coordinated efforts to artificially raise token prices before quickly selling off, leaving others with losses. 

• Wash trading: Creating fake trading volumes to mislead investors about demand and liquidity. 

• Front-running: Insiders using advance knowledge of large trades to gain unfair profits. 

To protect yourself, choose regulated exchanges that enforce strong risk management, maintain transparency, ensure secure custody, and comply with financial regulations. Always do your research and be cautious of unrealistic promises or suspicious trading behaviour. 

Key takeaways: 

• Be aware of pump and dump schemes, wash trading, and front running. 

• Use regulated platforms with a reputation for ethical practices and risk controls. 

• Trustworthy companies communicate clearly and operate responsibly.