The U.S. Securities and Exchange Commission (SEC) has warned about scammers exploiting traders’ worry of lacking out (FOMO) on social media. “If a crypto investment ‘opportunity’ sounds too good to be true, it probably is,” the SEC cautioned.
SEC Says Scammers Often Use Social Media to Defraud Investors
The U.S. Securities and Exchange Commission (SEC) printed an Investor Alert titled “Social Media and Investment Fraud” Monday.
The SEC’s Office of Investor Education and Advocacy warned that “fraudsters often use social media to scam investors.” Encouraging traders to be skeptical and “never make investment decisions based solely on information from social media platforms or apps,” the securities regulator described:
Fraudsters might exploit traders’ worry of lacking out to lure traders on social media into ‘crypto’ funding scams.
“If a crypto investment ‘opportunity’ sounds too good to be true, it probably is,” the SEC harassed. “Promises of high investment returns, with little or no risk, are classic warning signs of fraud.”
Fraudsters may submit fabricated historic returns on their web sites exhibiting excessive funding returns as a option to lure traders into their schemes.
Anyone contemplating investing in crypto belongings or any crypto-related investments ought to “take the time to understand how the investment works,” the securities watchdog suggested. “Check out 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, a number of different U.S. regulators have warned about cryptocurrency scams. Recently, authorities warned of the “pig butchering” cryptocurrency rip-off changing into alarmingly in style. The Federal Bureau of Investigation (FBI) additionally lately cautioned crypto traders to not fall for the liquidity mining rip-off.
According to blockchain analytics agency Chainalysis, illicit crypto volumes had been down 15% within the first six months of this yr, in comparison with the earlier yr. Specifically, “Total scam revenue for 2022 currently sits at $1.6 billion, 65% lower than where it was through the end of July in 2021, and this decline appears linked to declining prices across different currencies,” the agency famous.
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