Ken Chigbo
Independent Analyst
- The financial authorities issued some strong advice to potential investors in the cryptocurrency space, much caution required.
- There are several scams disguising themselves as cryptocurrency businesses or advisory firms to collect people’s monies unlawfully.
U.S. financial regulators, U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), recently issued a joint warning to investors. They are strongly advising them to be extra cautious and carry out necessary due diligence ahead of investing in the crypto space.
A warning was issued via by the SEC’s Office of Investor Education and Advocacy and the Office of Customer Education and Outreach at the CFTC. The financial authorities detailed crypto-related investment scams in which perpetrators are disgusting their scams as cryptocurrency trading businesses and advisory firms, in order to collect funds from unsuspecting investors.
The notice from the regulators noted:
In some cases, the fraudsters claim to invest customers’ funds in proprietary crypto trading systems or in ‘mining’ farms. The fraudsters promise high guaranteed returns (for example, 20-50%) with little or no risk,” according to the warning. “After the investors make an investment, typically using a digital asset such as Bitcoin, the fraudsters in some cases stop communicating with the investors altogether.
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