Securities regulators report increase in crypto fraud

By Staff | August 7, 2019 | Last updated on August 7, 2019
2 min read
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According to the umbrella group of Canadian provincial and U.S. state securities regulators, the North American Securities Administrators Association (NASAA), the prevalence of crypto frauds has increased this year.

Collectively, regulators have opened 130 new enforcement investigations so far this year involving crypto investments, and 35 regulatory enforcement actions have been completed or are currently underway, NASAA reports.

Additionally, since the regulators launched a task force in April 2018 to investigate initial coin offerings (ICOs) and other crypto-related investment products — an initiative known as Operation Cryptosweep — they’ve undertaken approximately 330 investigations or inquiries, and launched 85 enforcement actions in this area.

“Recent headlines of potentially new cryptocurrency products and the near tripling in value of some cryptocurrencies and the sharp increase in market capitalization for all cryptocurrencies are again creating an environment that attracts white-collar criminals, bad actors, and other promoters of illegal and fraudulent securities schemes,” Michael Pieciak, president of NASAA and Vermont’s commissioner of financial regulation, said in a statement.

“Investors should be mindful of the hype and be aware of the risks when considering whether to jump into cryptocurrency-related investment products,” he added.

To that end, NASAA also launched a new investor education video on Wednesday that aims to warn investors about crypto-based investment schemes.

“As with any investment opportunity, be cautious when dealing with promoters who claim their offering does not have to be registered with securities regulators. Investigate independently before you invest and contact your state or provincial securities regulator with any concerns before parting with your hard-earned money,” Pieciak said. staff


The staff of have been covering news for financial advisors since 1998.