NASAA urges investors to educate themselves on crypto

The North American Securities Administrators Association (NASAA) has argued that cryptocurrencies and digital assets currently pose the highest risk to investors and consumers.

Enforcement Section Committee co-chair Joseph P. Borg, Alabama Securities Commission director, cautioned that tales of crypto millionaires becoming rich after investing their savings in Dogecoin or Bitcoin (BTC) has attracted a plethora of inexperienced investors who are eagerly seeking to repeat that scenario.

However, Borg cautions that many of those who bet big on crypto also lose big. Those are the people who usually don’t make the headlines, he argued.

As part of an annual survey, NASAA asked investors to remain vigilant when involving themselves with such financial instruments and to account for the volatility of cryptocurrencies and digital assets.

This comes at a time when BTC has begun a painful retreat, sending chills down the spines of crypto bulls.

Borg specifically touched on crypto scams which often masquerade as “genuine investment options”.

It’s important for investors to understand what they are investing in and with whom they are investing, added NASAA president and Maryland Securities Commissioner Melanie Senter Lubin.

In other words, investors should be looking to educate themselves before committing any sizable amount of money to crypto and digital projects. Another worry is that digital assets do not fall in any regulatory framework, which makes them hard to pinpoint.

Enforcement Section Committee vice-chair Joseph Rotunda offered a similarly sobering recommendation. “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”, he said.

Meanwhile, scammers remain an ever-present danger to the sector. In fact, some $14bn was lost to scammers in 2021 according to a report by Chainalysis.

To avoid becoming a victim, Borg advised to stay away from unregistered private offerings. As he puts it, if a securities regulator thinks it’s too good to be true – it probably is.

If you don’t want to invest in crypto but want to have a bit of fun, you can spend your currencies at Bitcasino, 1xBit or FortuneJack.

Source

Updated: 01/13/2022 — 22:00

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