People in New York City, Long Island, and across the nation are intrigued by digital currency. This is unsurprising given the number of prominent people taking part in advertising campaigns for it and known investors who tout it as the wave of the future.
Still, as with any new investment vehicle, there will, unfortunately, be individuals who take advantage of new and inexperienced investors by selling unsuitable products. In some instances, they might be so brazen as to sell products that do not exist in an overt attempt at theft.
Even those who have experience in investing can fall victim to scams with cryptocurrency. If an investor believes they have been a victim of fraud, it may be embarrassing and tempting to think that the money is gone and nothing can be done. Fortunately, that is not usually the case, and there are steps to getting restitution while preventing the fraud from engulfing other people.
It is imperative to understand the Securities and Exchange Commission’s warning signs of fraud with these vehicles.
SEC offers advice when considering buying crypto and other digital assets
Since there is limited regulation with cryptocurrency and so many people are trying to profit from it, scams seem to crop up every day. Anytime an investment is promoted as “new” and prospective investors are pressured to jump in before it is too late (the “fear of missing out” – FOMO – phenomenon), there is a good chance that wrongdoing could take place.
If investment returns are guaranteed; those who are selling the products are unreachable, unknown, unlicensed and unregistered; the account is rising exponentially with no proof that it is legitimate; there are testimonials from others who say the investment is safe and worthwhile; and if it sounds like winning the lottery or some other avenue of accruing easy money, then something is likely amiss. When people who have invested cannot check their accounts or cannot get their advisors on the phone, it may be time to contact the SEC and seek help.
A recent case shows just how quickly money can disappear
One person recently had $11.6 million stolen from a Coinbase account after a fraudulent notification popped up and fooled them. The person purchased 200 Bitcoin after seeing the notification. After the purchase, the user was informed via popup that the account had been locked. The popup was allegedly from Coinbase, but it reality it was fake.
The user called the phone number provided in the notification as would be expected. The individual who answered the call told the user to make changes to the account. Once the alleged fraudster had access to the account, though, Bitcoin worth $11.6 million was taken from the account. These and other scams are seemingly happening every day.
Victims should hold those who stole or misled them accountable
Financial crimes like securities fraud might seem different from acts of physical theft like stealing a car or committing a burglary. In fact, though, they are often far more severe with people losing significantly greater amounts of money in these scams. There might be confusion, fear, worry, and uncertainty about what steps are available after being subjected to a crypto fraud.
Luckily, the SEC and other regulating entities are aware of what is happening and are catching those who are committing these crimes. People who have lost money should know their rights under the law.