Investors should be careful when investing in cryptocurrencies and other digital assets, according to a state agency.
The Arizona Corporation Commission published its “Top threats to investors in 2022” on January 10, highlighting digital asset launches online that promise profits without risk.
“The Corporation Commission Securities Division advises us that investments related to cryptocurrencies and digital assets are our number one threat to investors in Arizona,” said Chairman Lea Marquez-Peterson. “The stories of ‘crypto millionaires’ attracted many investors to delve into crypto or crypto-related investments last year, and with that, many stories of those who bet big and lost big began to appear, and we anticipate they will continue to appear in 2022.”
Also on the list are promissory note-related fraud offers, online money scams, and financial schemes connected to self-directed Individual Retirement Accounts (IRAs).
The list is compiled using a survey of securities regulators. It is conducted by the North American Securities Administrators Association.
What the top threats have in common, the ACC said, is that they are all offered privately. This protects scams from many state and federal disclosure requirements.
“Unregistered private offerings are generally considered high-risk investments and do not have the same investor protection requirements as those sold through public markets,” the ACC statement said.
On September 1, 2021, the US Securities and Exchange Commission issued a "investor alert” regarding an increase in cryptocurrency offerings. The announcement came on the same day that the SEC Announced charges against Satish Kumbhani and his company BitConnect. The firm allegedly defrauded investors of $2 billion through unregistered investments in a program involving digital assets.
ACC recommends an "if it's too good to be true, then it probably is" philosophy when considering investing in any type of digital asset, and watch for red flags such as fake customer reviews or "secure return payments, lucrative and guaranteed. in relatively short time frames.
