North American Securities Administrators Association (NASAA), the oldest international investor protection organization, said that cryptocurrency investment is among the top five investor threats for 2020.
It has been reported by the NASAA that the top five products or schemes likely to defraud investors in the coming year. In order to provide the report, the authority surveyed state and provincial securities regulators across the United States, Canada and Mexico.
As released on December 23, the report includes the top five schemes that are likely to trap investors in 2020, based on investor complaints, ongoing investigations as well as current enforcement trends.
However, the NASAA warned that alongside crypto-related investments, the top areas of concern for 2020 also include promissory notes, real estate investments, Ponzi schemes as well as online and social media investment schemes.
Christopher Gerold, the President of NASAA and Chief of the New Jersey Bureau of Securities, said that there is no type of investment that can guarantee an investment return.
“Anyone who says their investment offer has no risk is lying.”
“It is important for investors to understand what they are investing in and who they are investing with. Don’t fall for promises of guaranteed high returns with little to no risk or deals pitched with a false sense of urgency or limited availability.”
Likewise, in line with its fundamental mission of protecting consumers who purchase securities or investment advice, the NASAA has been actively monitoring the activity on cryptocurrency markets.
By mid-2018, the authority launched over 200 investigations on crypto-related investment products and initial coin offerings (ICOs) within its ongoing initiative “Operation Cryptosweep.”
So, previously, the NASAA issued an official warning for Main Street investors against the risks associated with cryptocurrencies and ICOs.
Thus, in the meantime, the scale of losses caused by crypto-related scams and thefts has seen a massive spike in recent years, surging from an estimated $1.7 billion in 2018 to as much as $4.4 billion in 2019.