An article by Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy, further reiterates the need for accurate cryptocurrency education. The ‘fear of missing out’ enthusiasm is showing no age boundaries – students, millennials, and even seniors are anxious to get on the bitcoin bandwagon. The problem is, without knowing anything about what they are investing in, there is a good chance of falling for one of the many fraudulent activities going on in the industry.

“Trendy investments are especially ripe for fraudsters so be aware there is a real risk of fraud. Scam artists prey upon the newness of an investment opportunity when there isn’t as much history about the product.  It’s also easier to sell an investor on an “everyone is buying it” sales pitch when there’s a lot of buzz about a certain investment product.” 

“Cryptocurrencies may be today’s shiny, new opportunity but there are serious risks involved.  Proceed with caution, do your research, evaluate your financial goals and most importantly, don’t flip a coin when you’re making investment decisions.”

Investors that are new to cryptocurrency and ICOs may be shocked to learn that some of these coins and tokens may have no value at all, that rankings and marketcaps can be manipulated, that their money may have gone overseas in less than a minute, and that there is likely no investor protection in place if the project turns out to be a scam. These unknowing investors may incorrectly assume a token gives them a share of future profits or equity in the project. Without adequate knowledge of the cryptocurrency industry, the confusion caused by celebrity endorsements and the seemingly unlimited advertising budget of some of these projects, lures in unsuspecting investors in droves.

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