The North American Securities Administrators Association (NASAA) recently announced the top 5 products and schemes likely to lure customers in a money trapping scheme and advised steps investors can follow to protect themselves from getting scammed. The list included cryptocurrency-related investments among its top five schemes.
NASAA Advises against Fairytale Investments
The list was released to the public on 23 December after a thorough consultation surveyance of its members, the state regulators and provincial securities regulators all across the United States, Canada, and Mexico. Apart from cryptocurrency backed investments, the list also included promissory notes, Ponzi schemes, real estate investments, and social media/internet-based investment schemes as the top five concerning areas for fraudulent trade.
Christopher W. Gerold, President of NASAA and Chief of the New Jersey Bureau of Securities expressed his concern and stated that it is extremely important for investors to get a thorough understanding of the deals they are investing in and whom they are investing it with.
Scammers and fraudulent traders are known to lure people with the promise of high returns with no risk. Investment offers and deals that sound too good to be true usually are and people should stay away from them. A guarantee of a no-risk investment is a sure tell sign of a fraudulent trade.
Most of the threats that an investor faces are concerned with private offerings that are exempted from federal state registration requirements. These private offerings are not transacted and sold through public stock exchanges making them highly unsafe forms of transaction. It is extremely essential for investors to be aware of whether their traders and salesperson follow the necessary registration guidelines or not. After all, transacting and dealing with a licensed investor guarantees safety and assurance.