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Securities Regulators: Crypto Scams Top Threat

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Cryptocurrencies and digital assets are the biggest threat to investors, according to new data from the Association of North American Securities Administrators (NASA).

An annual survey conducted by the Association of Non-Profit Regulators in the United States, Canada and Mexico urged investors to exercise caution when buying cryptocurrencies and digital assets.

“The most obvious sign of an investment scam is to offer guaranteed high returns with no risk,” NASA President Melanie Center Lubin said in a statement. “The best defense is education and information is the best defense for an investor against investment fraud.”

Raiders set a record last year with $14 billion in crypto thefts as a result of the rise of decentralized finance (DeFi) platforms, according to the blog of Chainalysis, a New York-based blockchain analytics research firm.

The researchers used data from North American securities regulators to identify the most problematic products, practices or schemes. Among the most cited scams are promissory notes fraud offers; Financial scams available via social media and online investment offers; and financial schemes associated with self-directed individual retirement accounts.

In a warning to investors, NASA said scammers are impersonating websites and using fake social media accounts to hide their identities. The trade group recommended that investors identify fake accounts by examining content, analyzing start dates, and looking at the quality of engagement. One recommendation is to beware of fake customer reviews and if it sounds too good to be true, it probably is.

The report came just days after PYMNTS announced that Pakistani regulators were investigating Binance, a popular cryptocurrency exchange, for a multi-million dollar Ponzi scheme.

The Federal Investigation Agency (FIA) has issued a notice to the company. The report stated that several online investment scams are operating in Pakistan, where investors are promised a high rate of return if they sign up additional clients.

Read more: Report: Binance faces scrutiny as Ponzi Mobile Apps fraudulent surfaces


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