Investors should always be wary of ‘too good to be true’ sounding investment opportunities, but new opportunities in cryptocurrency can be particularly difficult to evaluate for risks. The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) and the Wisconsin Department of Financial Institutions (DFI) caution consumers to watch out for scammers and thieves when they invest in cryptocurrency.

Cryptocurrency is a computer-based digital currency designed to work as a monetary system wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database. This database, or blockchain, uses strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership. Examples of cryptocurrencies include Bitcoin, Ethereum, Dogecoin, Litecoin, Binance Coin XRP, and Tron. These cryptocurrencies are often available through a crypto exchange such as CoinBase or Binance.

“Cryptocurrency investments may sound like exciting opportunities, but they can also pose significant risks. Consumers should use caution and do their research if considering investing in cryptocurrency,” suggests DATCP Secretary Randy Romanski. “Investors should also take care to safeguard their cryptocurrency keys, seed phrases, and exchange account information to prevent theft.”

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