North American Association of securities administrators (NASAA) prepared a report in which cryptocurrencies are included in the five main areas that pose a threat to investors in 2020.
After analyzing current trends and conducting a survey of state and local securities regulators in the United States, Canada, and Mexico, NASAA concluded that next year investors should exercise maximum caution with social media investment schemes, Ponzi schemes, debt obligations, and real estate and cryptocurrency investments.
“There are no guarantees that investments will bring profit. Do not believe someone who promises you a high return, while claiming that investments do not carry any risks,” said Christopher Gerold, President of the NASAA and head of the new Jersey securities Bureau, urging investors to choose projects more carefully.
The NASAA has published recommendations on how investors can protect themselves from fraud. First of all, you should avoid “closed offers” where securities are not registered in accordance with Federal requirements and are not available on open stock exchanges. If the seller does not have the appropriate license, registration, or permission from local regulatory authorities, it is a violation of the law.
“You don’t go to a doctor who doesn’t have a license and education, so why not apply the same approach to your investment? Even if you know a person well personally, in any case, it is worth checking their license and its validity period, ” added Christopher Gerold.
It is worth noting that the NASAA actively monitors the cryptocurrency market. By mid-2018, it had conducted more than 200 investigations related to fraud in the purchase of cryptocurrencies and initial token offerings (ICOS).