(Kitco News) The biggest pitfall for investors is falling for crypto fraud, according to the latest data released by the North American Securities Administrators Association (NASAA).
“NasAA’s securities regulators are far from revealing that investments related to cryptocurrencies and digital assets are our biggest investor threat,” said Enforcement Chairman of the Enforcement Section Joseph P. Borg, Alabama Securities Commission Director. “Stories of ‘cryptomillionaires’ attracted some investors to try investing in cryptocurrencies or crypto-related investments this year, and with them many stories of those who bet big and lost big began to emerge and they will continue with emerging in 2022. “
The data were published in the annual survey among North American securities regulators.
NASAA urges investors to be careful when looking for opportunities to make money, and advises people that nothing can be risk-free.
“The most common sign of an investment scam is an offer of guaranteed high returns without risk. It is important for investors to understand what they are investing in and with whom they are investing,” said Melanie Senter Lubin, President of NASAA and Maryland. Securities Commissioner. “Education and information are an investor’s best defense against investment fraud.”
Private offers are a popular way to cheat investors because many do not need to be registered with relevant authorities, the data showed.
“Unregistered private offerings are generally high-risk investments and do not have the same investor protection requirements as those sold through public markets,” Borg said.
Regulations regarding digital assets are still under development, leaving investors unprotected.
“Before jumping into the crypto craze, be aware that cryptocurrencies and related financial products may be nothing more than public fronts for Ponzi schemes and other fraud,” said Joseph Rotunda, Texas State Securities Vice President of the Enforcement Committee. Board Enforcement Division Director. . “Investments in cryptocurrency trading programs, interests in cryptocurrencies, cryptocurrencies and securitized tokens must be seen for what they are: extremely risky speculation with high risk of loss.”
Cryptocurrency-related crime reached a record level in 2021, with $ 14 billion in digital currencies stolen worldwide in fraud, according to a report released by blockchain analytics firm Chainalysis.
“Criminal abuse of cryptocurrency creates huge barriers to continued adoption, increases the likelihood of restrictions being imposed by governments, and worst of all, innocent people around the world sacrifice,” Chainalysis said.
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