The US SEC has always been wary about scams and illegal activities going on in the crypto space. So, the SEC now warns crypto investors about scammers exploiting their FOMO (fear of missing out) on social media. They said if something sounds too good to be true, it probably isn’t. Most of the time, we take a small chance because of our FOMO and lose money. It has happened with everyone in other ways.
Social media and scammers
The Securities and Exchange Commission of the US recently published an alert titled “Social Media and Investment Fraud.” It says that the primary medium for fraudsters to scam investors is social media. So, investors should always be cautious about where they draw their inspiration from over social media. At the same time, their investment decisions should never be based on information available on social media.
There are over 9000 cryptocurrencies right now, as per CoinMarketCap, and most of them have no use or are scam coins. So, when you get FOMO into a coin and buy it, the scammer dumps their holdings on you. And you end up holding useless coins with no buyers, use, or value.
Plus, investors should also be skeptical of any investment that promises very high returns and has zero or no risk. You have already seen what happened to platforms that offer high-interest rates on deposits. Even though they were not scams, but users still lost their money. So, stay away from such platforms or projects.
So, how should investors know whom to trust?
The SEC has given some advice in this regard as well. First of all, check the background of the person who is offering you the scheme, returns, or suggesting a coin. You can use investor.gov for the same. Then, you can also verify the founders behind a crypto project and go through their whitepaper. Only after doing your due diligence in all these aspects can you invest in a coin. For new investors, I would still say choosing among the top 5 to top 10 coins is the best idea.
What are your thoughts as SEC warns crypto investors about scammers using social media FOMO to get to users? Let us know in the comments below. Also, if you found our content informative, share it with your friends.
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