Why have digital currencies become the gold of the modern-day investor? The answer to this question is pretty simple and clear. You do not need to travel to one part of the world or perform a big task to stake a claim in the crypto market. All you have to do is to sit at your home in front of your computer or smartphone and hope for riches to stream in.
Bitcoin (BTC) Price Today – BTC / USD
Although some digital currencies such as Bitcoin (BTC) and Ethereum (ETH) are completely legitimate, a lot of Initial Coin Offerings (ICOs) are not legitimate and they have ensnared a lot of ill-informed investors. Smartereum.com shared a post on how to avoid these scams. The recent trend of Initial Coin Offerings has gotten the attention of state securities regulators, who started a “Cryptosweep” across North America at the beginning of this year. The watchdogs of the state have made forty-six enforcement actions in their crackdown, and more are on the way.
The Federal Watchdog In Policing Digital Currency Fraud
Where are the federal watchdogs in policing digital currency fraud? The U.S SEC (Securities and Exchange Commission) is contemplating whether to regulate cryptocurrencies as securities. The Commodity Futures Trading Commission (CFTC) – which regulates the derivatives markets – is also pondering on the decision. But none of these agencies have done much regarding the rein of scams.
The president of the North American Securities Administrators Association – Joseph Borg – who headed the probe of the state regulators, said that “while not every digital currency or Initial Coin Offering-related investment is a scam, it is crucial for individuals and companies selling these products to be aware that they aren’t doing so in a vacuum, adding that state and provincial regulations and laws may apply, especially securities laws.
Borg’s Recommendation on How to Protect Yourself from Fraud
- If the product qualifies as securities, it should be registered with the appropriate regulatory agencies.
- Investors should carry out their own thorough investigation before investing in any digital currency or Initial Coin Offering.
- The process of securities registration provides some investor protection by subjecting the offering to regulatory review.