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People who are into cryptocurrency know what a middleman is. Normally, a middleman works to assist the person who is in need of such service. In the finance world, this may be a different story and might cause the person to lose more than what you think. Nested exchanges are the middleman in the cryptocurrency world that might seem invincible during the whole process.
Nested exchange helps the user to trade their accounts or cryptocurrencies and helps them through its services within the system. As mentioned above, it is the middleman or the one who does the work for the user and does the trading across the platforms. However, nesting can be dangerous if overlooked.
Thus, it can be difficult to trace nested activities in the system when the user is not properly informed of what these exchanges are.
Nesting – Facts and Realities
Nesting is a financial phenomenon that exists to aid customers in some finance services offered by their trusted banks or crypto accounts. The purpose of having a nested account is to be able to use the services of a certain financial service in a region. One of the major reasons for nesting is the location barrier of the user.
For example, user X might want to open an account in a bank from Country Y while he is in Country X. Basically, his account in country X will not be available in-country Y. Which leads them to create a dummy or middleman account that can be accessible in-country Y. Meaning, the transaction is then processed in country Y instead of country X.
The implication of nesting in the industry is that the original bank is indirectly serving the customer who is not informed of such activity in their account. Now, the story changes when the customer knows about what really nesting is all about and how their account is played by the middleman.
Nested Exchanges – How Accounts Work In The System
Nested exchange happens when the user opens or creates an account from an official platform and uses it as the hosting account. For example, a nested account can be used to trade from different crypto exchange platforms available. You can send a request for a nested exchange and access your account using the dummy account on other platforms.
The idea of nesting in the Crypto World is quite a simple thing as mentioned above. A user can create an account with a regulated crypto exchange with the aim to offer crypto trading services to a third party through a nested account.
Some exchanges need KYC checks while others need no identification checks. For this reason, nested accounts can be a good type of fraud or scam strategy.
Dangers Of Having A Nested Account
Looking into how nesting happens in both the financial and crypto industries can be alarming. Nesting is subject to money laundering and other scam strategies. The account or bank that the nested account is connected to might not know who they are dealing with or who does all the money exchanges within the system.
In most cases, they did not know who they are dealing with during a transaction. For this reason, nested accounts need more thorough identity checking and transaction tracing.
Sadly, the framework and stability of the regulations that handle crypto exchanges are still in check which means that the possibility of fraud is possible. Moreover, nested exchanges are free to function in the system without a thorough checking as of this moment. In fact, you might have a nested account that you didn’t know about. Here are the dangers that an account holder might be in:
- Deposits have lower or fewer guarantees in their safety than the regulated exchange.
- Possible supporting or funding dangerous sites and illegal activities on the platform.
- Regulatory authorities might close down the system and will make you lose your trading funds and end up losing your crypto capital.
- Might be subject to legal repercussions by law enforcement during the investigation.
Unknowingly, one can be in great danger when having a nested account. The best way to avoid such repercussions is to now create a nested account in the first place. Moreover, nested exchanges mean bypassing identity checkers to function or access another crypto platform as another user.
The lack of security in some crypto platforms makes them more vulnerable to various fraudulent acts. Stolen crypto accounts are also one of the reasons why few users are dimmed responsible for some illegal transactions in the system. Thus, the very fact the crypto exchanges offer in-person cash payments makes it easier to scam people. In short, we can only imagine the transactions that happen with a nested account.
Another thing, nested accounts are under surveillance because various fraudulent acts are happening in the crypto industry. Large platforms tend to have security barriers that require identity checks on who the account holder is. Moreover, the level of security cannot be bypassed by anyone with a fake identity.
Basically, using a nested account can do more bad than good. You might be risking your account on the wrong trading platform and end up being questioned by the law enforcers. Remember, a nested account is an exchange account. This means, it doesn’t really exist in the crypto industry as an official account but just a dummy one.
Trade The Right Way And Avoid Nesting
Crypto trading and cryptocurrencies are ones that can surely let someone earn big amounts. Correct trading strategies and exchanges come with a lot of effort. Avoiding fast earning through nested accounts is one of the things that can help a trader last long in the crypto industry. Remember, nesting is bad news and can be a dangerous move for anyone who wants to earn.
While nested accounts tend to act as the main account, it will never be the account that holds the main transactions in the system. Thus, a legitimate verification of who the trader or user is is one of the reasons why having a nested account can be tricky. Remember, when a certain trade is made with a questionable identity it will lead to further investigation by the authorities.
You can also be a smart trader by following the right process. Avoid nesting and trade smartly. The crypto industry is as fierce as the finance industry. Bet on your future without having bad motives which will lead you to do the wrong things. Trade smart and don’t let anyone gamble your account creating a dummy account for trading. Nested exchanges can be a faster way to earn bulk but it is never the right way.