Crypto trading fraud: Broker demands proof of liquidity
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Crypto trading scam warning: Broker demands proof of liquidity for withdrawal
Several clients report that their trading broker only authorizes the withdrawal of their alleged funds on the condition of “proof of liquidity” in the form of a cash payment.
Experience shows that proof of liquidity is often a scam. Even when payments have been made in this form, no affected individuals have yet received payment of their alleged funds. A "proof of liquidity" is a clear sign of a fraudulent broker and fraudulent trading practices.
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3Trading broker demands proof of liquidity – don’t pay!
Numerous fraudulent online trading brokers demand "proof of liquidity" or a "withdrawal guarantee" before they can supposedly transfer profits in Bitcoin or euros to your account. This requirement is supposedly intended to convert the supposed profits into fiat currency or is justified by "money laundering regulations." In reality, however, "proof of liquidity" is not required on trading platforms.
Proof of liquidity is only relevant for companies that need to prove they have sufficient cash, such as when purchasing real estate. Even then, it involves the submission of documents, not payments! As a private investor, you are in no way obligated to prove your liquidity through a payment. Nor is the law requiring proof of liquidity under "money laundering regulations." This excuse is simply another scam designed to take additional money from you.
Real experience report from an injured client
The firm, which specializes in investment fraud, is representing, among other things, a client who was asked to provide proof of liquidity in the form of half a million euros in cryptocurrency on a cryptocurrency exchange specified by the fraudsters in order to receive a payout. Shortly after the instruction to transfer the Bitcoins, the fraudsters illegally transferred them onward – of course, no payout was made. Thanks to blockchain tracing by our professional IT forensics team, we are already on the trail of the perpetrators.
Any request for payment upfront, whether as a condition of a payout or supposedly for taxes, deposits, or commissions, should put you on high alert.
With the right plan to success
If an online trading broker requires you to provide "proof of liquidity," a "withdrawal guarantee," pay taxes, deposits, or commissions as a condition of withdrawal, you should immediately consult an investment fraud attorney. You may have become a victim of a fraudulent broker.
Under no circumstances should you continue paying! Any additional payments would only increase your losses.
If you previously granted the fraudulent broker access to your computer using remote access software such as AnyDesk or TeamViewer, immediately secure your computer, change your passwords, and take legal action to minimize the risk of identity theft.
If you have become a victim of a fraudulent broker, a reputable law firm will provide you with sound and competent advice to enforce your claims.
We analyze your situation and offer you a free, non-binding initial consultation, in which we outline the next necessary and promising steps for you to recover your invested trading funds. We also assess the risk of identity theft and take appropriate action with the cryptocurrency exchanges or trading platforms.
We report the investment fraud on your behalf to the Federal Financial Supervisory Authority (BaFin) and other relevant authorities, examine your claims for damages, investigate the options for recovering your funds, and initiate criminal proceedings. To effectively enforce your claims, we work closely with the relevant authorities, public prosecutors, and IT specialists. Our targeted forensic measures and our many years of experience, particularly in the area of cryptocurrency fraud, have often enabled us to bring the perpetrators to justice.
The law firm, which specializes in banking and capital markets law as well as investment fraud, has been successfully representing injured investors for over 22 years.
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