The Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) have recently issued a warning for investors against fraudulent websites purporting to manage trading and businesses advisory.
Essentially, the warning is targeted at cryptocurrency investors who need to be extremely cautious when investing in any cryptocurrency or crypto-related business. The warning was issued on April 24th, 2019.
This is what part of the warning says:
In some cases, the fraudsters claim to invest customers’ funds in proprietary crypto trading systems or in “mining” farms. The fraudsters promise high guaranteed returns (for example, 20-50%) with little or no risk.
Both agencies have observed such fraudulent behavior in the crypto space, and through this joint warning they are pointing out six signals that often characterize fraudulent operations, and urge investors to closely scrutinize crypto-related investment offers and carry out their own due diligence analysis before investing.
The six warnings are:
- “Guaranteed” high investment returns.
- Complicated jargon and language that is difficult to understand.
- Unlicensed sellers.
- Sounds too good to be true.
- Unsolicited offers
- Pressure to buy RIGHT NOW.
The timing of the warning coincides more or less right after the indictment of two fraudsters involved in a bitcoin scheme that promised investors basically risk-free returns of up to 50%.