Crypto scams are top investor threats for 2022, state regulators say

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Cryptocurrency and digital asset fraud top the list of top scams state regulators say will be used against retail investors in 2022, the North American Securities Administrators Association (NASAA) announced today. at a press conference.

The annual scam ranking is an “early warning system” to alert the public, other regulators and policymakers to the most common investor scams in the coming year, NASAA President said, Melanie Senter Lubin.

Because the bad actors “pull their scams out of the headlines to make them believable, I don’t think the fact that cryptocurrencies and digital assets are the main ploy is surprising, given the media attention.” Joseph P. Borg, Director of Alabama Securities. The NASAA enforcement section committee said.

“The stories of crypto millionaires and now billionaires have drawn some investors to try their hand at investing in cryptocurrencies or crypto related investments this year, and with them many stories of those who have bet big and lost big have started to appear, and they will continue to appear in 2022, ”Borg added.

The Alabama Securities Commission issued a cease and desist notice against 97 cryptocurrency trading websites in November after state investors were scammed by fraudulent trading platforms that promised excessive returns, flagged fictitious account values ​​and charged undisclosed fees.

“When NASAA criticizes these fraudulent platforms, we are not criticizing the legitimate market,” Borg added.

As cryptos gamble on investor hope, promissory notes “attack fear,” said Joseph Rotunda, director of the enforcement division of the Texas State Securities Board and vice chairman of the committee. the application section of NASAA, during the press conference.

Many investors, especially the elderly, are worried about market volatility, rising interest rates, inflation and the lingering effects of the pandemic. “They want to be sure and know how much they will earn on their investments. The crooks take advantage of it, ”Rotunda said.

Regulators have also indicated that they expect social media fraud and self-directed IRA countermeasures to increase in 2022.

Self-directed IRAs are a legal way to put money aside for tax deferral, Lubin said. “It is a new characteristic of crooks to try to make it look like you are protected from potential fraud when nothing could be further from the truth,” she added.

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