A Closer Look at Investor Threats in 2020
In the ever-evolving landscape of investments, cryptocurrency has made waves, but not all of them are good. According to a report released by the North American Securities Administrators Association (NASAA), cryptocurrency scam threats rank among the top five investor concerns for 2020. How did we arrive at this alarming conclusion? Well, grab your popcorn, because it’s a wild ride through the world of investment scams.
What the NASAA Report Reveals
On December 23, the NASAA outlined the top five schemes poised to ensnare unsuspecting investors. This esteemed organization surveyed regulators across the U.S., Canada, and Mexico to compile the list, which didn’t leave much to be desired. The top contenders include:
- Cryptocurrency-related investments
- Promissory notes
- Real estate investments
- Ponzi schemes
- Online and social media investment scams
Talk about a buffet of bad choices! With scams lurking around every corner, investors need to keep their wits about them.
No Free Lunch: NASAA’s Warning
Christopher Gerold, the NASAA president, made it crystal clear:
“No one can guarantee an investment return.”
In layman’s terms, if it sounds too good to be true, it probably is. If someone is promising you sky-high returns with zero risk, they’re likely pulling your leg. So, how should you navigate this investment minefield?
Know What You’re Investing In
Understanding the fine print before plopping down your cash is crucial. Gerold emphasizes that investors must do their due diligence, ensuring they fully grasp where their money is going and with whom they are investing. If an investment opportunity is pitched with a sense of urgency—like limited spots or exclusive offers—it’s time to run the other way.
The Rise of Crypto Scams: A Massive Concern
The NASAA isn’t just sitting on its laurels. Since mid-2018, they have kicked off “Operation Cryptosweep,” an initiative that has led to over 200 investigations into dubious cryptocurrency investments and initial coin offerings (ICOs). After witnessing losses soar from an estimated $1.7 billion in 2018 to around $4.4 billion in 2019, it’s clear the scale of crypto-related scams is no laughing matter. Investors, be aware: the stakes are high!
