I have written about cryptocurrency scams many times for more than four years. Most recently I warned you about a new Securities and Exchange Commission (SEC) warning to investors about cryptocurrency related scams including investments in confusing cryptocurrency advisory and trading systems as well as cryptocurrency mining farms. Quite often these scams promise high guaranteed returns with little or no risk such as reflected in recent federal charges brought against two Nigerians accused of operating a fraudulent Bitcoin investment where they promised investors profits of as high as 50% without any risk or limitations. Cryptocurrencies are legitimate, but scammers are increasingly taking advantage of the public’s fascination with cryptocurrencies to take old forms of scams and update them with a cryptocurrency twist. The perception of many in the public is that cryptocurrencies offer an easy path to riches coupled with many people violating the cardinal rule of investing by investing in things that they do not understand creates a perfect storm for a wide variety of cryptocurrency scams.
Cryptocurrency scams know no borders and recently the UK’s Financial Conduct Authority issued a warning about cryptocurrency scams involving social media posts and phony celebrity endorsements used to promote cryptocurrency scams. According to the FCA the number of cryptocurrency scams in the UK tripled in just the last year. Cryptocurrencies are relatively unregulated in the UK. CryptoUK a self-regulatory body for the cryptocurrency industry has asked for regulations, but at the moment, they remain unregulated, leaving UK investors on their own when it comes to determining whether particular cryptocurrency opportunities are legitimate or not.
A good example of what another type of cryptocurrency scam looks like can be found by going to this website touting HoweyCoins.
While HoweyCoins may appear to provide a lucrative investment opportunity, there is no such thing as HoweyCoins. It is a scam. Fortunately, it is a scam website that was set up by the Securities and Exchange Commission to serve as a warning to unwary investors about the dangers of cryptocurrency scams.
As I have mentioned many times previously, you should never invest in anything that you do not fully understand. Cryptocurrency scams quite often involve complicated language and investment terms that is purposefully unclear in an effort to confuse potential investors from understanding the real facts. You also should not invest in anything without investigating the people offering the investments. You can go to http://www.iinvestor.gov to learn about the licensing and registration status of someone offering to sell you investments. In addition, as always, if the investment sounds too good to be true, it usually is. Facebook for a time banned all advertisements promoting cryptocurrencies due to the plethora of cryptocurrency scams, but has reversed this position and now does accept ads for cryptocurrencies. Some of the things to be on the lookout for in regard to cryptocurrency scams are promises of high, guaranteed returns on your investment, false claims of being SEC compliant, allowing you to invest using your credit card and pump and dump scams. For more information about pump and dump scams related to cryptocurrencies, check out the Scam of the day for April 11, 2018.
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