Why Bitroom is a Scam (And How to Avoid Similar Risks)
If you've heard of Bitroom as a cryptocurrency exchange, you're not alone-but here's the hard truth: Bitroom scam isn't real. The California Department of Financial Protection and Innovation (DFPI) added it to their official Crypto Scam Tracker in 2025. This isn't a rumor-real people have lost hundreds of thousands of dollars to fake exchanges like this one. In one documented case, a victim lost $179,000 to a platform named "Bitroom" that vanished overnight. Legitimate exchanges like Binance or Kraken have years of public records, regulatory oversight, and transparent operations. Bitroom has none of that.
What the California DFPI Says About Bitroom
The California DFPI is a state agency that tracks fraudulent cryptocurrency platforms. Their Crypto Scam Tracker lists platforms that operate without licenses, steal user funds, or disappear after collecting deposits. Bitroom appears on this tracker with no legitimate business registration, physical address, or regulatory filings. When you search for Bitroom on official government databases or major crypto industry reports, you'll find zero credible references. That's because it doesn't exist as a real exchange-it's a scam operation designed to trick people into sending cryptocurrency.
How Scam Exchanges Like Bitroom Operate
These fake platforms use the same playbook every time. First, they create professional-looking websites with fake testimonials and fake trading charts. Then, they target users on social media or through misleading ads promising "guaranteed" high returns. Once you sign up, they pressure you to deposit funds quickly with phrases like "limited-time bonus" or "exclusive access." After you send cryptocurrency, they either disappear or block your account. In pig butchering scams, scammers build trust over weeks before stealing everything. The name comes from how they "fatten up" victims with false hope before "slaughtering" their funds. The DFPI reports this method caused over $1.2 million in losses across California alone in 2025.
Red Flags: Spotting a Fake Crypto Exchange
Here's exactly what to look for to avoid scams like Bitroom:
- No regulatory license-Legitimate exchanges like Kraken is registered with the New York State Department of Financial Services and the EU's MiCA framework. Scam platforms never show licensing details.
- Fake customer support-Scams often have no real phone number, email, or physical address. If you call their "support line," you'll get automated messages or no response at all.
- Too-good-to-be-true returns-Guaranteed 100% profits? A real exchange like Binance clearly states all trading carries risk. Scams promise impossible gains.
- Pressure tactics-"Act now or lose this offer!" is a classic scam tactic. Legitimate exchanges never rush your decisions.
- Unusual deposit methods-Scams often ask for cryptocurrency deposits only (no fiat options) or require you to send funds to a personal wallet address.
Legitimate Alternatives You Can Trust
| Exchange | Founded | Regulatory Status | Key Security Features |
|---|---|---|---|
| Binance | 2017 | Registered in Malta, Singapore, and operates Binance.US under US oversight | 98% funds in cold storage, $1 billion insurance fund, regular proof-of-reserves audits |
| Kraken | 2011 | Licensed in US (money transmitter), EU (MiCA compliant), and Canada | Multi-signature wallets, SOC 2 Type 2 certification, transparent proof-of-reserves |
| Gemini | 2014 | New York State Department of Financial Services (NYDFS) regulated | Custody insurance, offline storage, regular third-party security audits |
| Coinbase | 2012 | Registered with FinCEN and NYDFS; operates globally with clear regulatory compliance | 98% cold storage, insurance for hot wallets, regular penetration testing |
All these exchanges have public regulatory filings, clear fee structures, and years of operational history. You can verify their licenses on government websites like the California DFPI Crypto Scam Tracker or the Financial Crimes Enforcement Network (FinCEN) database. Never trust an exchange that hides its regulatory status or uses vague terms like "self-regulated."
Steps to Protect Yourself from Crypto Scams
Follow these practical steps to avoid becoming a victim:
- Check the DFPI Crypto Scam Tracker-Before using any exchange, search their name on the California DFPI website or your local financial regulator's database.
- Verify licenses directly-Don't rely on the exchange's website. Go to the regulator's official site (like NYDFS for New York) and search for the exchange's license number.
- Avoid unsolicited offers-If you get a DM on social media promising "free crypto" or "guaranteed profits," it's a scam. Legitimate exchanges never contact you this way.
- Use two-factor authentication-Always enable 2FA on your accounts. Scams often target accounts without it.
- Never share private keys-No legitimate exchange will ever ask for your wallet's private key. If they do, it's a scam.
Frequently Asked Questions
Is Bitroom a real crypto exchange?
No. Bitroom has no regulatory licenses, physical address, or operational history. It's listed on the California DFPI's Crypto Scam Tracker as a fraudulent platform. Legitimate exchanges like Kraken or Binance publish clear regulatory details and have been operating for years with verified user funds.
How do I report a crypto scam?
Report it immediately to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov or your local financial regulator. In California, file a report with the DFPI through their official website. Include all transaction details, screenshots, and communication logs. This helps authorities track and shut down scams faster.
What is a "pig butchering" scam?
A "pig butchering" scam is a type of crypto fraud where scammers build trust over weeks or months before stealing funds. They start with small, fake profits to make you feel confident, then pressure you to deposit more. Once they have your funds, they disappear. The name comes from how they "fatten up" victims with false hope before "slaughtering" their money. The DFPI reports this method caused over 60% of crypto scam losses in 2025.
Can I recover funds lost to Bitroom?
Recovering funds from scams like Bitroom is extremely difficult. Once cryptocurrency is sent to a scammer's wallet, it's usually gone forever. This is why prevention is critical. Always verify exchanges through official regulators before depositing funds. If you've been scammed, report it to authorities immediately-they may track patterns and shut down operations, but individual fund recovery is rare.
How do I verify an exchange's legitimacy?
Check three things: First, visit the regulator's official website (like NYDFS for New York or FinCEN for US money transmitters) and search for the exchange's license number. Second, look for proof-of-reserves reports published by the exchange-legitimate platforms regularly publish these. Third, search for the exchange name on the California DFPI Crypto Scam Tracker or similar databases. If any of these checks fail, it's not safe to use.
