The Securities and Exchange Commission (SEC) of the United States has issued a warning about con artists preying on investors’ FOMO on social media. The SEC issued a warning: “If a cryptocurrency investment “opportunity” sounds too good to be true, it probably is.”
SEC Says Scammers Often Use Social Media to Defraud Investors
Monday saw the release of an investor alert from the U.S. Securities and Exchange Commission (SEC) titled “Social Media and Investment Fraud.”
Fraudsters frequently use social media to defraud investors, according to a warning from the SEC’s Office of Investor Education and Advocacy. The securities regulator advised investors to exercise caution and “never base investment decisions solely on information from social media platforms or apps”
Fraudsters may exploit investors’ fear of missing out to lure investors on social media into ‘crypto’ investment scams.
The SEC emphasized that “if a cryptocurrency investment ‘opportunity’ sounds too good to be true, it probably is.” “Classic warning signs of fraud are promises of high investment returns with little or no risk.”
In order to entice investors into their schemes, fraudsters may also post fabricated historical returns on their websites showing high investment returns.
The securities watchdog advised anyone thinking about investing in crypto assets or any investments related to crypto to “take the time to understand how the investment works.” “Use the search tool on Investor.gov to look up the background (including license and registration status) of anyone offering you an investment in securities.”
Aside from the SEC, a number of other American regulators have issued alerts about cryptocurrency fraud. Authorities recently issued a warning regarding the alarming rise in popularity of the “pig butchering” cryptocurrency scam. The FBI recently issued a warning to cryptocurrency investors not to fall for the liquidity mining scam.
The first half of this year saw a 15% decrease in illicit cryptocurrency volumes compared to the same period last year, according to blockchain analytics company Chainalysis. To be more precise, the company said that “Total scam revenue for 2022 currently sits at $1.6 billion, 65% lower than where it was through the end of July in 2021, and this decline appears linked to declining prices across different currencies.”