Texas Securities Board Added Cryptocurrencies to List of Top Threats to Investors

Texas regulators have included cryptocurrencies in their list of top threats to investors, according to the latest Texas Investor Guide.

In its tenth anniversary edition of the State Securities Board’s “Texas Investor Guide: Strategies for Investing Wisely and Avoiding Financial Fraud,” the regulator added cryptocurrency to the list of investments that raise red flags and require careful scrutiny. The document specifically outlined that cryptocurrencies are extremely volatile and difficult to understand for a non-professional trader.

The purported threats

Among the purported threats, the report pointed out investment opportunities in cryptocurrency mining pools and initial coin offerings directed at seniors and retirees, who apparently prioritize security over speculation. The document further warned:

“In the riskiest cryptocurrency-related offerings, promoters do not provide audited records or other financial information to back up their claims of extraordinarily high profits. […] Promoters’ claims of ‘secure’ cryptocurrency-related investments and ‘guaranteed’ profits should be approached with caution: Cryptocurrencies tend to be extremely volatile and investors may be unable to quickly liquidate products tied to them.”

The regulator’s advice

The guidance advised potential investors not to contribute to cryptocurrency offerings unless they can determine some basic facts about the company and its physical location. Otherwise, it further explained, investors might transfer funds to anonymous third parties.

The regulator outlined the importance of dealing with registered entities and keeping in mind that deceived investors will be left with little or no resource.

Along with cryptocurrencies on the list, the report also cited unregistered individuals, oil and gas offerings, promissory notes

In late December, the North American Securities Administrators Association (NASAA) — an international investor protection organization — stated that cryptocurrency investment is among the top five investor threats for 2020. The NASAA’s report included the top five schemes that are likely to trap investors in 2020, based on investor complaints, ongoing investigations as well as current enforcement trends.

Source
cointelegraph

The post Texas Securities Board Added Cryptocurrencies to List of Top Threats to Investors appeared first on Bit News Live.

Sending
User Review
0 (0 votes)

Comments (No)

Leave a Reply