If you are thinking about investing in the stock of companies that tout high returns associated with cryptocurrency — use caution. Do your research, and only invest money you can afford to lose.
In an emerging sector like cryptocurrency, it is not unusual to see both legitimate start-ups and not-so-legitimate players. According to the 2019 BBB ScamTracker Risk Report, cryptocurrency scams are the second riskiest in the nation regarding the prevalence of victims and dollars lost.
These less-than-reputable new companies often make glorified claims about new cryptocurrency-related products and services — including blockchain technologies and Initial Coin Offerings — in an effort to raise the market price of their shares. The buzz around cryptocurrency businesses enables con artists to launch fraudulent ventures that lack transparent financial reporting. Also, scammers will mimic the successful business models of legitimate companies in order to trick investors and steal their money.
Watch out for these common cryptocurrency scams:
- Cryptocurrency exit scam: These scams trick consumers into investing in a new form of…