SEC Reveals 5 Main Red Flags of Crypto Fraud
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The US Securities and Exchange Commission (SEC) has called investors to avoid fear of missing out (FOMO), given the rise in price of some digital assets in recent years. The regulator said in a recently published Investor Alert report that bad actors continue to exploit the "rising popularity of digital assets."

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"If you are considering a digital asset-related investment, take the time to understand how the investment works and to evaluate its risks," the agency said.

Crypto Market Too Big to Remain Unregulated, Says SEC Chair

The watchdog also listed the main red flags of cryptocurrency-related fraud:

  • "Guaranteed" high investment returns.
  • Unlicensed/unregistered sellers.
  • Skyrocketing account values.
  • Sounds too good to be true.
  • Fake Testimonials.

The regulator publishes warning as the total market capitalization of cryptocurrencies is once again beyond the $2 trillion threshold. As iHodl earlier reported, the SEC filed a lawsuit against the founder of crypto pyramid BitConnect for conducting a fraudulent and unregistered placement of securities valued at $2 billion.

According to the agency, BitConnect's founder Satish Kumbhani, promoter Glenn Arcaro and Future Money Ltd organized a fraudulent scheme worth of 325,000 bitcoins ($2 billion at the time and ~$15 billion at today's price rate). The SEC also claims BitConnect lured investors with inaccurate claims of up to 40% monthly revenue with its "software volatility trading robot" that did not actually exist.

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