Table of Contents
COTPS quickly rose to prominence through its aggressive referral marketing and the promise of crypto passive income. It’s no wonder you’ve heard about it and now want to know whether it’s legitimate. This COTPS crypto platform review has all the answers.
We break down what COTPS is, what happened, and key factors to consider before investing in any crypto platform. So, is COTPS legit or a scam? Find out.
What Is COTPS?
COTPS or COTP, also known as Cryptos OTC Trading Platform Limited, was a supposed over-the-counter crypto trading platform that started its promotions in 2022. It claimed to use automated algorithms to find profitable crypto trades every two hours and generate consistent passive returns for investors.
The numbers it promised were extraordinary, up to 3% per day or 0.3% every two hours. All users did was to simply deposit USDT into the platform. COTPS also ran an aggressive referral program. It offered commissions of up to 15% for recruiting new investors and additional commissions when those recruits brought in further investors. The minimum deposit was just 9 USDT, which made it easy for anyone to start.
COTPS claimed to be registered in the USA and regulated by FinCEN MSB.
However, FinCEN (Financial Crimes Enforcement Network) is only responsible for preventing financial crimes. MSB, on the other hand, is also not a regulatory body. This means COTPS was not licensed by an official body to offer investment products. But is cotps.com a scam? Let’s find out.
Red Flags That Expose COTPS as a Scam
1. Unrealistic Guaranteed Daily Returns
It is not ideal in the crypto trading space to offer daily yield guarantees, let alone 3% per day. Due to the volatility of the crypto market, traders, hedge funds, and algorithmic systems usually operate under conditions that make consistent daily returns impossible. Any platform promising such returns is most likely not generating those returns through crypto trading.
2. No Proof of Real Trading Activity
It is suspicious that COTPS never disclosed which exchanges it traded on. This, coupled with it not sharing what cryptocurrency pairs it used and how its arbitrage algorithm worked. Users had no way to verify that any real trading was happening. A legit platform would be transparent about its trading history and on-chain activity.
3. Withdrawal Delays Disguised as Technical Issues
In May 2022, users faced a delay in receiving verification messages during withdrawals. COTPS had claimed it was because it was switching SMS providers. However, beneath all of that was an artificial delay created by COTPS to block withdrawals.
When users tried to withdraw, they found their SMS codes arrived too late to be valid, or did not arrive at all. Shortly after, the platform posted a message claiming they experienced a hack attack and that they would resolve it within three to five weeks.
But the site then went offline entirely. The California Department of Financial Protection and Innovation (DFPI) later confirmed that it was a COTPS exit scam after the body filed a cease-and-desist order. Estimated losses from the collapse reported by affected users exceeded $333 million.
4. Pyramid Scheme Referral Structure
COTPS applied the typical Ponzi scheme strategy. It paid early investors with the money from new members. Moreover, it paid investors for recruiting new people and additional commissions when those recruits recruited further investors. Even the DFPI’s cease-and-desist order described it as a pyramid scheme.
5. Sudden KYC Demands at Withdrawal
COTPS usually does not impose any Know Your Customer (KYC) requirements on users at deposit. But when it’s time to withdraw, users must complete their crypto KYC. This is a well-documented scam tactic to create friction at the exit point to delay or prevent withdrawals.
6. Anonymous Founders and No Customer Support Channels
No one knew the founders of COTPS. Additionally, the company didn’t have a verifiable address or an official customer support channel. When the withdrawal verification scam occurred, users had no channel to escalate issues. They also could not contact any regulatory body, since COTPS never disclosed which regulator, if any, oversaw its operations.
What Happened to COTPS Users?
Over $333 million was lost to the COTPS Ponzi scheme. Users who had funds on the platform at the time of shutdown lost everything. There was no way to recover lost funds. In September 2022, the DFPI formally issued a cease-and-desist order against COTPS for offering unregistered securities and making untrue statements of material facts to investors.
The order confirmed that COTPS operated as a High Yield Investment Program (HYIP), which is referred to as a Ponzi-style scheme by the regulatory body.
Following the COTPS exit scam, another scheme appeared under the domain cotp. finance, operating as COTP Safe Miner. It uses the same model where users will connect a wallet, deposit USDT, earn passive income, and earn up to 12% per referral.
How to Identify a Legitimate Crypto Platform
To avoid falling victim to platforms like COTPS, here is what to look for before depositing on any crypto platform.
1. Verifiable Registration and Licensing
Start by confirming whether the crypto platform you intend to use is licensed by a recognized financial regulator. This goes beyond a mere business registration.
Examples of regulators, with confirmed licensing, include the Securities and Exchange Commission (SEC), the Financial Conduct Authority (FCA), or equivalent national regulators. COTPS falsely claimed FinCEN MSB status, which is a registration, not a license. Always verify the claim on the regulator’s own website.
2. No Guaranteed Returns
If a platform is guaranteeing huge weekly, daily, or even monthly returns, regardless of market conditions, it is most likely not genuine. Be wary because legit platforms fluctuate with the market, especially in the crypto market, where even Bitcoin can drop 10-20% in a week.
3. Two-Factor Authentication (2FA)
Legitimate platforms usually require 2FA crypto security on both login and withdrawal. This protects your account from unauthorised access even if your password is compromised. In the case of the COTPS withdrawal problem, it weaponised the SMS verification step to block users from taking their money. It never cared about protecting users.
4. Anti-Phishing Codes
Some reputed platforms allow users to set a personal anti-phishing code, which comes with every email from the platform. If you receive an email without your code, you know it’s not from the real platform. This feature protects users from fake messages, which are pretty common in crypto arbitrage scams.
5. Transparent Fee Structure
A trustworthy crypto trading platform publishes its fees clearly: trading fees, withdrawal fees, and any other charges. COTPS had no transparent fee structure, and users reported being presented with unexpected fee demands when trying to withdraw.
Best Platform to Safely Sell Crypto – Prestmit
Prestmit is one of the safest crypto trading platforms to exchange your crypto for cash. It supports selling BTC, ETH, USDT, USDC, Litecoin, DOGE, TRON, and BNB, and you can receive payment directly to your local bank account.
Prestmit’s rates calculator shows you exactly what your crypto is worth in Naira or Cedis before you sell. If you are trading large amounts of crypto, the OTC (over the counter) desk lets you agree on a fixed rate before the transaction happens, so the price doesn’t change mid-sale, and you don’t run a loss.
For example, if you start selling at $65,000 per BTC but by the time your full order executes, the price has dropped to $64,200, Prestmit ensures you get $65,000 per BTC. It’s designed for sellers who need to move significant volume quickly and predictably.
Additionally, Prestmit enforces security with biometric verification and two-factor authentication (2FA) at login and for every transaction. You can also contact the customer support if you need help resolving anything. Response is swift and helpful.
Frequently Asked Questions
1. Is COTPS still operating?
No. COTPS shut down in May 2022. The website went offline, withdrawals were frozen, and users’ funds became inaccessible. However, follow-up schemes using the COTP name have appeared.
2. Can I get my money back from COTPS?
Recovery is difficult and not guaranteed. If you deposited via credit card or bank wire, a chargeback request is an option worth considering, but seeing that so much time has passed, it may no longer be possible.
3. What is a safe alternative to COTPS?
Prestmit is a transparent, legitimate platform for selling crypto for cash. It offers real exchange rates, a transparent fee structure, standard security features including 2FA and biometric verification, and direct payment to local bank accounts.
Conclusion
COTPS was not a trading platform. It was a crypto Ponzi scheme that used the language of crypto arbitrage to collect deposits and paid early users with money from recruits. The clearest lesson from COTPS is that guaranteed returns and huge referral commissions are always warning signs.
Regardless of how professional the platform looks or the hype around it, always do your own research. If you are looking to sell crypto safely, start with a platform that is transparent about its fees, regulated, and does not make false or exaggerated promises.
