ARTICLE
13 September 2021

SEC Issues An Investor Alert About Digital Asset And "Crypto" Investment Scams!

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Foley & Lardner

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Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
The Securities and Exchange Commission's (SEC) Office of Investor Education and Advocacy (OIEA) and Division of Enforcement's Retail Strategy Task Force (RSTF) ...
United States Technology

The Securities and Exchange Commission's (SEC) Office of Investor Education and Advocacy (OIEA) and Division of Enforcement's Retail Strategy Task Force (RSTF) issued an investor alert to "remind investors to watch out for investment schemes involving digital assets and "Crypto." Fraudsters continue to exploit the rising popularity of digital assets to lure retail investors into scams, often leading to devastating losses."  The September 1, 2021 Investor Alert was entitled "Digital Asset and "Crypto" Investment Scams – Investor Alert" coincided with the news release about a lawsuit and my blog that the SEC files suit for a $2 BILLION fraud by global crypto lending platform!.  The Investor Alert included these red flags of fraud:

"Guaranteed" high investment returns.  Promises of high investment returns with little or no risk are a classic warning sign of fraud.  Fraudsters may post fabricated historical returns on their websites showing high investment returns.

Unlicensed/unregistered sellers.  Unlicensed, unregistered sellers commit much of the securities fraud targeting retail investors in the U.S.  Check out the background (including license and registration status) of anyone offering you an investment in securities using the search tool on Investor.gov.

Skyrocketing account values.  Depictions of investment accounts rapidly increasing in value and providing large returns are often fake.  This is a tactic fraudsters use to entice investors with the prospect of great wealth.

Sounds too good to be true.  If an investment "opportunity" sounds too good to be true, it probably is.  Remember that the potential for high investment returns usually involves high risk.

Fake Testimonials.  Also, never rely solely on testimonials in making an investment decision.  Fraudsters sometimes pay people – for example, actors to pose as ordinary people turned millionaires, social media influencers, and celebrities – to tout an investment on social media or in a video.

Please stay safe and invest cautiously!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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