The United States Securities Commission (SEC) has warned against scammers exploiting investors’ fear of missing out (FOMO) on social media. “If a Crypto Investing “Opportunity” Sounds Too Good to Be True, It Probably Is“, warned the SEC.
The SEC says fraudsters often use social media to defraud investors.
The United States Securities Commission (SEC) on Monday issued an investor alert titled “”.
The SEC’s Office of Investor Education and Advocacy warned that “fraudsters often use social media to defraud investors“. Encouraging investors to be skeptical and to “never make investment decisions based solely on information from social media platforms or applications“, the securities regulator described:
Fraudsters can exploit investors’ fear of missing out to lure them on social media into ‘crypto’ investment scams.
“If a Crypto Investing “Opportunity” Sounds Too Good to Be True, It Probably Is“, pointed out the SEC. “Promises of high returns on investment, with little or no risk, are classic warning signs of fraud.”
Fraudsters may also post fabricated historical returns on their websites showing high investment returns to lure investors into their schemes.
Anyone considering investing in crypto-assets or any investment related to crypto-assets should “take the time to understand how investing works“, advised the securities watchdog. “Check the background (including licensing and registration status) of anyone offering you a securities investment by using the search tool on Investor.gov.”
Besides the SEC, several other US regulators have warned against cryptocurrency scams. Recently, authorities warned against the cryptocurrency scam “pig butchering“, which is enjoying alarming popularity. The Federal Bureau of Investigation (FBI) also recently warned cryptocurrency investors about the “liquidity mining“.
According to blockchain analytics firm Chainalysis, illicit crypto volumes were down 15% in the first six months of this year, compared to the previous year. More precisely, “the scam’s total revenue for 2022 currently sits at $1.6 billion, down 65% from what it was through the end of July in 2021, and this decline appears to be tied to the decline in the prices of different currencies“, noted the cabinet.