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AG Nessel Re-Issues Warns against Crypto Scams during Financial Literacy Month
During Financial Literacy Month, Michigan Attorney General Dana Nessel has taken a proactive stance to inform the public about the risks involved in rising crypto scams. Her re-issued alert “Cryptocurrency! What is it? What are the Risks?” underscores digital currencies’ speculative nature in the volatile market.
“During Financial Literacy Month, it’s crucial to understand the risks associated with cryptocurrency. While it is often portrayed as a lucrative investment, the reality is far from glamorous. Cryptocurrencies are volatile, susceptible to scams, and lack the regulatory protections of traditional investments,” Nessel emphasized.
Contrary to traditional fiat currencies controlled by governments, cryptocurrencies operate independently through private entities or coded algorithms. They facilitate direct peer-to-peer transactions, increasingly promoted as investment prospects. However, the lack of underlying value and legal protection against fraud or collapse they poses significant risks for investors.
Crypto Scams Cost Investors Over $1 Billion
Crypto scams are increasing alarmingly. Reports from the Federal Trade Commission (FTC) reveal that over 46,000 individuals have fallen victim since 2021. Losses top $1 billion – a staggering 60x increase from 2018 levels, which highlights the urgency of combating cryptocurrency-related fraud.
Cryptocurrency investment scams remain a grave concern. Scammers draw victims with promises of substantial profits, operating fake platforms offering deceptive opportunities. Alarmingly, the Federal Trade Commission reports $575 million in losses stem from such fraudulent crypto investment schemes.
As cryptocurrency advances, regulatory frameworks progress. Over 42 nations considered or legislated crypto laws last year. The SEC aims to finalize rules by 2024, mandating investment advisors store clients’ crypto assets with “qualified custodians”, potentially reshaping the industry. This shows regulatory clarity becoming a global priority.
Michigan AG and FTC Caution in Investment Decisions
Michigan’s Attorney General Dana Nessel cautions potential investors. Key advice includes conducting extensive research before investing. She advises avoiding making hasty decisions due to aggressive sales tactics, fear of missing out, or celebrity endorsements. She concluded:
“Never invest more than you can afford to lose”.
Furthermore, FTC warns individuals or businesses that demand payment in cryptocurrency as reputable businesses usually accept conventional payment methods. Promises of substantial profits or returns should raise suspicions, as all investments inherently involve risks. Moreover, the advisory warns about the convergence of online dating platforms and investment advice, urging vigilance.
Lastly, the FTC warns against individuals attempting to blend online dating with investment advice, noting that anyone on a dating app pushing cryptocurrency investments or requesting cryptocurrency transactions is likely a scammer.
AG Nessel Re-Issues Warns against Crypto Scams during Financial Literacy Month
