Scammers using investors’ FOMO (fear of missing out) via social media has been warned by the U.S. Securities and Exchange Commission. The SEC warned that if a crypto investment opportunity sounds too good to true, it most likely is.
Monday’s Investor Alert was published by the U.S. Securities and Exchange Commission. It titled “Social Media and Investment Fraud.
The Office of Investor Education and Advocacy of the SEC warned that fraudsters frequently use social media to con investors.
To lure investors to ‘crypto’ scams, fraudsters might use investors’ fear of missing the opportunity to exploit their fear.
The SEC stated that if a crypto investment opportunity sounds too good to true, it most likely is. “Promises that high investment returns are possible with minimal or no risk are classic indicators of fraud.”
In order to attract investors, fraudsters might also put up fake historical returns on their websites.
The securities watchdog recommended that anyone considering investing in crypto assets, or any crypto-related investments, “take the time understand how the investment works.” Use the Investor.gov search tool to check the background of any person offering investment in securities.
The SEC is not the only U.S. regulator to warn about cryptocurrency scams. Authorities recently warned that the ” Pig Butchering” scam involving cryptocurrency has become alarmingly common. Recent warnings from the Federal Bureau of Investigation (FBI), caution crypto investors against falling for the liquidity-mining scam.
Chainalysis, a blockchain analytics firm, reported that illicit cryptocurrency volumes fell 15% over the first six months of the year. This is compared to the year before. The firm stated that “Total scam revenue for 2022 is currently at $1.6 billion, which is 65% less than it was through July 2021. This decline appears to be linked with declining prices across various currencies.”