It’s not a secret for anyone, that assets under management market in cryptocurrencies is a very young and can be characterized with the following problems:

Direct fraud of investor or trader; Loss the control over the funds; Lack of transparency.

Let’s look at how different services approach these problems.

Trading groups and personal managers

This type of asset management is a perfect example of a direct fraud and is common for swindlers with some kind of signal groups, some of them even with paid entrance. On the channel, they publish profitable deals to create a FOMO effect. Sometimes the authors of such channels use Photoshop to change the balances or the trade results to encourage their followers to sends them assets for management. At this stage, investors do lose control over their deposit and most likely they won't get their money back. One of many examples is a telegram group with 20k members — Andrew Trade (currently deleted):

Trading through direct API access

Another popular way of trusting the assets to a manager is by giving direct access to your exchange API key. With this method, the investor basically loses access to his funds and puts a huge risk on himself.

This is what happens: when providing your API key to a trader, the investor can seriously harm his balance because of the absence of any risk management tools and uncareful trader’s actions. There are lots of cases when traders do not use any stop-orders and market swing can cost the investor a big portion of his balance.

Moreover, unavailability to put any restriction on the trader and allowed trading pairs can cause loss of a full deposit. Using the client’s assets trader can buy his own sell orders on low-liquidity pars, washing away the money. We have such example from the private telegram chat.

Copy-trading

The most popular service out there is copy-trading or social trading. The idea is that you choose a trader and automatically follow his activity. That way you can follow a human trader, trading algorithm or even a chat with signals.