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SEC Issues Warning About Crypto and Digital Asset Scams in New Investor Alert

The U.S. Securities and Exchange Commission has issued a warning to buyers about scams lurking in the world of cryptocurrency investing.

In a brand new investor alert, the SEC’s Office of Investor Education and Advocacy (OIEA) and Division of Enforcement’s Retail Strategy Task Force (RSTF) says that scammers are profiting from the rising recognition of digital belongings.

“Fraudsters proceed to use the rising recognition of digital belongings to lure retail buyers into scams, usually resulting in devastating losses.

If you’re contemplating a digital asset-related funding, take the time to grasp how the funding works and to guage its dangers. Look for warning indicators that it could be a rip-off.”

The report makes 5 key “purple flag” suggestions on tips on how to shield towards getting scammed.

  • “‘Guaranteed’ excessive funding returns… with little or no threat are a basic warning signal of fraud.
  • Unlicensed/unregistered sellers. Check out the background (together with license and registration standing) of anybody providing you an funding in securities.
  • Skyrocketing account values. Depictions of funding accounts quickly rising in worth and offering massive returns are sometimes faux.
  • If an funding ‘alternative’ sounds too good to be true, it in all probability is. Remember that the potential for prime funding returns often includes excessive threat.
  • Fake Testimonials. Fraudsters generally pay… actors to pose as atypical folks turned millionaires, social media influencers, and celebrities to tout an funding.”

The announcement follows on the heels of the SEC filing charges towards the crypto lending platform BitConnect and two of its prime executives. BitConnect is accused of defrauding buyers of roughly $2 billion and the case is believed to symbolize the biggest crypto rip-off of all time.

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Disclaimer: Opinions expressed at The Daily Hodl are usually not funding recommendation. Investors ought to do their due diligence earlier than making any high-risk investments in Bitcoin, cryptocurrency or digital belongings. Please be suggested that your transfers and trades are at your personal threat, and any loses it’s possible you’ll incur are your duty. The Daily Hodl doesn’t advocate the shopping for or promoting of any cryptocurrencies or digital belongings, neither is The Daily Hodl an funding advisor. Please notice that The Daily Hodl participates in internet affiliate marketing.

Featured Image: Shutterstock/raigvi/ZinetroN

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