U.S. state securities regulators have revealed that cryptocurrency investments are their top investor threat this year. “Before you jump into the crypto craze, be mindful that cryptocurrencies and related financial products may be nothing more than public facing fronts for Ponzi schemes and other frauds,” one regulator warned.
Crypto is the number one threat to U.S. securities regulators
The North American Securities Administrators Association (NASAA) on Monday released its “annual list of top threats to investors.”
The NASAA, formed in 1919, is a nonprofit association of state, provincial, and territorial securities regulators in the U.S., Canada, and Mexico. The association has 67 members, including the securities regulators in all 50 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
“The main threats to investors were determined by interviewing North American securities regulators to identify the most problematic products, practices or schemes,” said the association. “Investments related to cryptocurrencies and digital assets” top the list of threats most often cited by securities regulators, the association noted.
Alabama Securities Commission Director Joseph P. Borg commented:
From afar, NASAA securities regulators have revealed that investments related to cryptocurrencies and digital assets are our number one threat to investors.
He elaborated: “Stories of ‘crypto millionaires’ attracted some investors to try their hand at investing in cryptocurrencies or crypto-related investments this year, and with them, many stories of those who bet big and lost big began appearing, and they will continue to appear in 2022.”
NASAA warned, “Digital assets do not fit perfectly within the regulatory framework for existing investors, and it may be easier for promoters of these products to steal from the public. All investments involve the risk that some or all of the funds invested will be lost.
Texas State Securities Board Enforcement Division Director Joseph Rotunda cautioned:
Before you jump into the crypto craze, be aware that cryptocurrencies and associated financial products can be nothing more than public fronts for Ponzi schemes and other frauds.
He continued: “Investments in cryptocurrency trading programs, interests in crypto mining pools, crypto depository accounts and securitized tokens should be seen for what they are: extremely risky speculation with a high risk of loss.”
