With any investment, there is the potential for scam and significant risk.
So, it pays to be cautious.
When it comes to crypto trading, there’s a tulip mania-frenzy.
It’s so wild that investors are quite literally taking out second mortgages and home equity lines of credit to buy them. However, with popular trends come risks and the potential for fraud.
Cyberattacks and scams cost investors millions of dollars. Scam artists use phishing techniques, pump and dump schemes, ICO fraud, even Ponzi schemes.
The rate of cryptocurrency scams have only increased.
In 2017 alone, investors reportedly lost over $490 million to crypto-related scams.
According to the US Federal Trade Commission (FTC), investors lost nearly $532 million in in the first two months of 2018.
UK Regulator Updates Scam Warning
The UK Financial Conduct Authority (FCA) re-published its warning on scams.
All as the agency sees a rising number of scam complaints.
Social media ads for example link to sites that appear real, but are not. Other scam artists use images of celebrities to make an investment appear to be real.
Te UK’s Action Fraud group even raised the alarm on“the growing problem of criminals using the reputation of prominent people in cryptocurrency scams” . According to Cryptovest, examples including Deborah Meaden from the BBC’s Dragons’ Den and Martin Lewis, the founder of Money Saving Expert. Names are used without knowledge or consent.
Others are tricking investors into buying coins that don’t even exist. Once they have investor money in hand, scam artists shut down the offering without warning for example. Oftentimes, they’ll refuse to return the funds to investors, or ask for more money with a promise of returned funds.
If you’re going to invest in cryptocurrency, it is essential that you do your due diligence.
If not, you stand to lose everything.
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