The U.S. Securities and Exchange Commission (SEC) has issued a new alert regarding investment fraud related to digital assets and cryptocurrencies.
this announcement The report shared by the Office of Investor Education and Advocacy of the US Securities and Exchange Commission and the retail strategy task force of law enforcement agencies highlighted the “destructive losses” that retail investors face due to fraud.
The SEC attributed the “increasing popularity” of initial token products (including cryptocurrencies, tokens and tokens) to the main reason for the increase in fraud and exploits.
The SEC also stated that the soaring price of certain digital assets has been a key factor for scammers to attract unsuspecting investors:
“Investors may be less skeptical of investment opportunities that involve new things or’frontiers’, or they may fall into fear of missing out (FOMO).”
Investor’s FOMO is mainly due to the bullish performance of many tokens and irreplaceable token plans recently. The alert acknowledges that one of the main reasons investors FOMO is “they will miss the opportunity to become very wealthy” mentality.
In order to help investors stay sober, the US Securities and Exchange Commission recommends that digital asset investors understand and assess risks, and also pay attention to warning signs of possible scams, including promises of high investment returns, unclear license and registration status, and false recommendations.
The SFC emphasized BitConnect $2 billion scam leads to huge losses For retail investors. The warning stated: “The platform allegedly paid investor withdrawals from investors’ funds and failed to trade investors’ bitcoins in accordance with its statement, causing the platform to collapse and investors losing a large amount of funds.”
On September 1, the chairman of the US Securities and Exchange Commission Gary Gensler reiterated the need for a regulatory framework that can help cryptocurrency investors resist fraud and other related risks.
Gensler stated that the relevance of cryptocurrencies in the next 5 to 10 years will be Highly dependent on public policy frameworkHe expressed support for this statement, “finance is ultimately about trust.”