SEC Warns Crypto Investors of Scammers Exploiting Their Fear of Missing Out on Social Media

The U.S. Securities and Exchange Commission (SEC) has warned concerning scammers exploiting investors’ worry of missing out (FOMO) on social media. “If a crypto investment ‘opportunity’ sounds too smart to be true, it most likely is,” the SEC cautioned.

SEC Says Scammers usually Use Social Media to Defraud Investors

The U.S. The Securities and Exchange Commission (SEC) printed a capitalist Alert titled “Social Media and Investment Fraud” Monday.

The SEC’s workplace of capitalist Education and support warned that “fraudsters usually use social media to scam investors.” Encouraging investors to be skeptical and “never build investment choices based mostly entirely on data from social media platforms or apps,” the securities regulator described:

Fraudsters could exploit investors’ worry of missing bent lure investors on social media into ‘crypto’ investment scams.

“If a crypto investment ‘opportunity’ sounds too smart to be true, it most likely is,” the SEC stressed. “Promises of high investment returns, with very little or no risk, are classic warning signs of fraud.”

Fraudsters can also post unreal historical returns on their websites showing high investment returns as the simplest way to lure investors into their schemes.

Anyone considering finance in crypto assets or any crypto-related investments ought to “take the time to know however the investment works,” the securities watchdog suggested. “Check out the background (including license ANd registration status) of anyone giving you an investment in securities exploitation the search tool on capitalist.gov.”

Besides the SEC, many different U.S. regulators have warned concerning cryptocurrency scams. Recently, authorities warned of the “pig butchering” cryptocurrency scam changing into alarmingly well-liked. The Federal Bureau of Investigation (FBI) jointly recently cautioned crypto investors to not fall for the liquidity mining scam.

According to blockchain analytics firm Chainalysis, illicit crypto volumes were down 15 % within the 1st six months of this year, compared to the previous year. Specifically, “Total scam revenue for 2022 presently sits at $1.6 billion, 65% less than wherever it absolutely was through the top of July in 2021, and this decline seems coupled to declining costs across totally different currencies,” the firm noted.

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