Cryptocurrency is becoming a legitimate industry, but it’s probably not happening fast enough.
Fraud Is Still Too Consistent
A new report suggests that more than $32 million was lost to cryptocurrency scams in 2018. This is a raging sign that the industry still lacks appropriate regulation and that hackers and malicious actors are still too active throughout the space.
What can we do about this? It’s a question that’s likely on enthusiasts’ minds everywhere, whether they’re longtime traders with tons of experience or they’ve traded only .0001 percent of a bitcoin in the past. Either way, regardless of what you’ve traded or invested in, if you have a stake in the industry, consistent fraud is likely to pose a threat to you one way or another.
The Financial Conduct Authority released data regarding the massive losses incurred over the previous year in the United Kingdom with assistance from an organization known as Action Fraud. The number of scams that occurred in 2018 more than tripled than the number reported in 2017. This is proof that the crypto industry’s protection protocols have weakened. Either that, or scammers are developing newer and stronger ways of getting past the hidden lines.
In all, approximately 1,800 scams were reported in the U.K. in 2018. During the previous year, only 530 were reported. Victims lost an average of $18,500 each.
Director of Action Fraud Pauline Smith expressed her disappointment in the findings, claiming:
These figures are startling, and provide a stark warning that people need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.
Indeed, Smith brings up a very valid point. Perhaps the problem is not that regulation is either too weak or non-existent in some areas. Perhaps it’s not even that hackers and malicious actors are becoming too prominent. Maybe people just aren’t being careful enough with their money.
Every analyst will probably tell you the same thing: if something sounds too good to be true, it probably is. People clearly aren’t considering their investments enough. It’s important to read the “fine print” on everything. While it may be boring or confusing, there’s no reason as to why a person shouldn’t be familiar with every aspect of the investment opportunity they’re considering.
Make Sure You Understand Everything Before Investing
If there’s something that seems strange or wacky, or if something is hard to understand, get a lawyer or legal compliance officer or whoever you need to make sure your money isn’t going to wind up in a black hole somewhere.
In case it’s not clear enough yet, the message from all this is, “Be careful.” There are simply too many fraudulent venues out there to be taking any risks, and regulation is not yet fully solidified in most areas.