Crypto scams are by far the biggest threat to investors – NASAA

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(Kitco News) The number one trap for investors falls for crypto scams, according to the latest data released by the North American Securities Administrators Association (NASAA).

“From a distance, NASAA securities regulators have revealed that investments related to cryptocurrencies and digital assets are our main threat to investors,” said Enforcement Section committee co-chair Joseph P. Borg, director of the Alabama Securities Commission. “The stories of ‘crypto millionaires’ 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 bet big and lose big have started appearing, and they will continue to appear in 2022. “

The data was published in the annual survey of North American securities regulators.

NASAA calls on investors to be cautious when looking for opportunities to make money, advising people that nothing can be without risk.

“The most common telltale sign of an investment scam is an offer of guaranteed high returns without risk. It is important that investors understand what they are investing in and who they are investing with,” said Melanie Senter Lubin, President from NASAA and Maryland. Securities Commissioner. “Education and information are an investor’s best defense against investment fraud. “

Private offers are a popular way to scam investors, as many do not need to be registered with the proper authorities, the data showed.

“Unregistered private offerings are generally high risk investments and do not have the same investor protection requirements as those sold in public markets,” Borg said.

Regulations for digital assets are still under development, leaving investors unprotected.

“Before you jump into the crypto craze, be aware that cryptocurrencies and related financial products can be just public fronts for Ponzi schemes and other frauds,” said Joseph Rotunda, vice president of the Law Enforcement Section Committee, Director of the Texas State Securities Board’s Enforcement Division. . “Investments in cryptocurrency trading programs, interests in crypto-mining pools, crypto deposit accounts, and securitized tokens should be viewed for what they are: extremely risky speculation with the risk of high loss. “

Cryptocurrency crime hit an all-time high in 2021, with $ 14 billion in digital currencies stolen around the world in scams, according to a report by blockchain analysis firm Chainalysis.

“Criminal abuse of cryptocurrency creates huge barriers to continued adoption, increases the likelihood of restrictions being imposed by governments, and, worse yet, victimizes innocent people around the world,” Chainalysis said.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

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