Calling crypto the top source of investor fraud in 2019 may sound like fighting words, but it may have more to do with broadly surveying an investor class that is largely unfamiliar with how crypto assets work, and naturally skeptical.
Helen Partz reports today at Cointelegraph that the North American Securities Administrators Association, a top U.S. regulator in the investment space, has announced it list of top five threats to investors, and “cryptocurrency-related investments” are at the very top.
Since the NASAA has been part of the American landscape since 1919, you might think at first glance that the agency has some interest in keeping crypto interest from multiplying.
However, the meat of Partz’ report shows that the NASAA simply surveyed its members and reported what they said.
“NASAA surveyed its members, the state and provincial securities regulators throughout the United States, Canada and Mexico, to identify threats investors are likely to see in 2020,” reads yesterday’s press announcement.
It’s interesting, for context, to look at what else NASAA members identified as top threats: promissory notes, Ponzi schemes, real estate investments, and social media investment schemes.
It’s clear that the NASAA members were thinking broadly: many of these are quite vague. For instance, real estate investments as a sector represent one of the most common and solid ways to grow wealth within the American economy. Similarly, “social media investment” can mean just about anything.
In addition, some of the remarks that Partz reports from NASAA top brass shows that they’re mostly “fraud-agnostic” in that they just want investors not to fall for big promises.
“No one can guarantee an investment return,” NASAA President Christopher Gerold said. ““Anyone who says their investment offer has no risk is lying,” “It is important for investors to understand what they are investing in and who they are investing with. Don’t fall for promises of guaranteed high returns with little to no risk or deals pitched with a false sense of urgency or limited availability.”
How big is crypto fraud?
“The scale of losses caused by crypto-related scams and thefts have seen a massive spike in recent years, surging from an estimated $1.7 billion in 2018 to as much as $4.4 billion in 2019,” Partz writes.
Let’s see what those numbers look like in 2020 – and, for ultimate protection, always rely on Gerold’s pretty universal rule: don’t fall for fancy promises!
