Bitcoins and other cryptocurrencies offer great promise both for legitimate financial transactions and scammers.  They are not simple and no one should get involved with Bitcoins unless they truly understand how they work.  Investing in something because it appears good when you haven’t thoroughly investigated both the person offering the investment and the investment itself is a recipe for disaster.  Just ask the victims of Bernie Madoff.
Earlier this week the Securities and Exchange Commission (SEC) brought charges against Maksim Zaslavskiy and his companies REcoinGroup and DRC World, also known as Diamond Reserve Club.  The SEC alleges that Zaslavskiy and his companies defrauded investors in these companies through initial coin offerings (ICOs) which are a way to raise capital through cryptocurrencies.  In this case, the SEC alleges that Zaslavskiy sold unregistered securities in his companies and offered non-existent cryptocurrencies.  In addition, the SEC says that numerous representations made to investors to induce them to invest in the companies were totally false.
ICOs are being used now by companies that are too small to do an initial public offering (IPO) of stock and instead offer cryptocurrencies, the price of which is represented to rise with the value of the company.  ICOs are not a scam, but according to the SEC, in this case they were.
TIPS
Again, you should never invest in anything unless you have investigated the person offering the investment and the investment itself.  ICOs in particular are quite complicated.  The SEC has warned investors to be wary of ICOs involving companies that have little financial history or are not required by federal regulations to file financial disclosures. It is also important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made.  You also may want to check out the SEC’s investor education website at www.investor.gov.
Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository.  This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her.  You can also check with your own state’s securities regulation office for similar information.  Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association.
You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular  investment adviser.
Here is a link to the SEC’s warning about possible problems you can encounter when investing in Bitcoins or other cryptocurrencies.
https://www.sec.gov/oiea/investor-alerts-bulletins/investoralertsia_bitcoin.html