INDIANAPOLIS — As cryptocurrencies continue to generate headlines around the world, Secretary of State Connie Lawson is again reminding Hoosiers to be cautious concerning investments in cryptocurrencies.
As part of her ongoing efforts to promote financial literacy and sound investment practices, Secretary Lawson has released an investor advisory underscoring the inherent risks in cryptocurrencies and warning signs of investment fraud.
Common risks include:
- Cryptocurrency is subject to minimal regulatory oversight and is susceptible to hacks
- Cryptocurrency accounts are uninsured
- Cryptocurrency investments are highly volatile
- Many initial coin offerings (ICOs) are based entirely overseas, preventing recovery of lost funds in many cases
Common Red Flags of Investment Fraud:
- “Guaranteed” high investment returns. There is no such thing as guaranteed investment returns, and there is no guarantee that the cryptocurrency will increase in value.
- Unsolicited offers. An unsolicited sales pitch may be part of a fraudulent investment scheme. Cryptocurrency investment opportunities are promoted aggressively through social media.
- Sounds too good to be true. If the project sounds too good to be true, it probably is. Watch out for exaggerated claims about the project’s future success.
The full report can be found online at https://www.in.gov/sos/securities/files/Investor%20Advisory%20-%20Cryptocurrencies.pdf