The SEC Office of Investor Education and Advocacy and the CFTC Office of Customer Education and Outreach warned investors about fraud on digital assets and cryptocurrency trading websites. As described more fully in the Investor Alert, these scams often take the form of "advanced fee fraud scams," in which a fraudster attempts to get an investment, and then disappears with the money.
The SEC and CFTC highlighted several key indicators that an investment opportunity may be fraudulent, such as:
- claims of high returns at low or non-existent risk;
- claims that their investment strategy is secretive or uses hard to understand language, or new, poorly understood technology;
- spelling, grammar and other errors in the pitch;
- unlicensed and/or unregistered sellers;
- unsolicited offers; and
- time-sensitive pitches that pressure investors into failing to properly research the offer.
The SEC and CFTC also emphasized the importance of carefully examining and researching any and all claims related to a potential investment.
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