Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.
SEC Warns Crypto Investors About Scammers Exploiting Their Fear of Missing Out on Social Media – Regulation Bitcoin News
The US Securities and Exchange Commission (SEC) has warned of scammers exploiting investors’ fear of missing out (FOMO) on social media. “If a crypto investment ‘opportunity’ sounds too good to be true, it probably is,” the SEC warned.
The SEC says fraudsters often use social media to defraud investors
The US Securities and Exchange Commission (SEC) published an investor alert on Monday titled “Social Media and Investment Fraud”.
The SEC’s Office of Investor Education and Advocacy warned that “fraudsters often use social media to deceive investors.” Encouraging investors to be skeptical and “never make investment decisions based solely on information from social media platforms or apps,” the securities regulator described:
Fraudsters can exploit investors’ fear of missing out to lure investors on social media into “crypto” investment scams.
“If a crypto investment ‘opportunity’ sounds too good to be true, it probably is,” the SEC emphasized. “Promises of high investment returns, with little or no risk, are classic warning signs of fraud.”
Scammers may also post fabricated historical returns on their websites showing high investment returns as a way to lure investors into their schemes.
Anyone considering investing in cryptoassets or other crypto-related investments should “take the time to understand how the investment works,” the securities watchdog advised. “Check the background (including license and registration status) of anyone offering you an investment in securities using the search tool on Investor.gov.”
Besides the SEC, several other US regulators have warned about cryptocurrency scams. Recently, authorities warned of cryptocurrency “pig slaughtering” scams that are becoming alarmingly popular. The Federal Bureau of Investigation (FBI) also recently warned crypto investors not to fall for the liquidity mining scam.
According to blockchain analytics firm Chainalysis, illicit crypto volumes fell by 15% in the first six months of this year, compared to the previous year. Specifically, “Total fraud revenue for 2022 currently stands at $1.6 billion, down 65% from where it was through the end of July in 2021, and this decline appears to be tied to declining prices across currencies,” noted the firm.
What do you think of the SEC Crypto Investment Scam Warning? Let us know in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
