ICOs, Crypto Contracts, Identity Theft Are Top Emerging Investor Threats For 2018

Pennsylvania’s Secretary of Banking and Securities Robin L. Wiessmann released a list of emerging threats facing investors in 2018.

Pennsylvania’s Secretary of Banking and Securities Robin L. Wiessmann on Tuesday released a list of emerging threats facing investors in 2018, along with a reminder to take the time to investigate before investing their money in the age of technological advancement.

"Investments by their very nature involve some element of risk – no legitimate investment opportunity can advertise itself as 'guaranteed,'" said Wiessmann. "One of the most important things an investor can do to protect their interests is to investigate – the product, service, company, and people trying to sell to you – before they invest their time and money."

Retail investors have once seen an overheating asset in the face of the Verge (XVG) cryptocurrency that grew out of control.

Weissman believes the biggest threats to watch out for are threefold, based on a survey by the North American Securities Administrators Association (NASAA):

Initial coin offerings (ICOs). Funding for ICOs exceeded $4 billion this year, and the market is becoming more saturated with new projects and riskier. ICOs are sometimes walking around regulations by offering special deals to large-scale investors, but they are still attractive to small-scale retail investors, and some ICOs are already accepting cash directly, promoting themselves to an audience unaware of cryptocurrency risks.

Cryptocurrency Contracts for Difference (CFD). A complex financial instrument that allows investors to speculate on the price of an underlying asset and can be highly leveraged, which multiplies the impact of price changes on profits and losses. Cryptocurrency CFDs enable investors to speculate on price changes in highly volatile cryptocurrency such as Bitcoin or Ethereum. CFDs, which are prohibited from being sold to U.S. citizens or residents, are marketed through Internet platforms, and regulators caution that some of these platforms can be fraudulent themselves.

Identity Theft. As cryptocurrencies are becoming more valuable, some amounts of funds are still kept in insecure ways. Identity theft is becoming another threat for wallet holders and buyers, as exchanges are rallying to increase their security. In a recent case, the users of Electroneum (ETN) had to reset their accounts due to exposed emails from their initial registration.

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US Regulator Warns Against Cryptocurrency-Related Stock Scams

Wiessmann’s warning comes as the Financial Regulatory Authority (FINRA) also issued a cautionary note in December last year, telling investors to keep an eye against cryptocurrency-related stock scams.

Gerri Walsh, FINRA’s senior vice president for Investor Education, stated:

“It can be difficult for investors to avoid the lure of the cryptocurrency markets, especially when prominent people express interest in it, and news reports and social media tout the promise of guaranteed quick fortunes and skyrocketing returns. But it is important to do your research. Even when legitimate companies enter a hot, new sector, con artists almost always follow suit.”