Latvia’s Financial and Capital Market Commission (FCMC) recently published a digital currency fraud warning. The FCMC’s official statement is titled, “The FCMC warns investors about possible fraud in cryptocurrency transactions” and warns investors that digital currency-related fraud is on the rise because,
“cryptocurrencies operate in an infrastructure that is currently less regulated than the financial and capital markets, which creates opportunities for attempted fraud and undermines public confidence in cryptocurrencies.”
What kind of fraud?
In particular, the FCMC warns of a type of fraud they are calling “Business Clone.” The FCMC describes Business Clone fraud as an individual or group of people acting like legitimate businesses and service providers and eventually getting a victim to believe they are investing in a real asset or corporation. Therefore, getting them to hand over their cash or digital currency to the fraudster.
How to protect yourself from fraud
“Be careful when seeing ads online and on social media that promise a significant return on investment from cryptocurrency or related products,” says the FCMC. “Always be careful if you are contacted by strangers who put pressure on you to invest quickly or promise a return that sounds too good to be true.”
Unfortunately, digital currency-related crime is continually on the rise. Recently, Lance Morginn, the president of Blockchain Intelligence Group (CNSX: BIGG|OTC: BBKCF| WKN: A2JSKG), gave us some insight into why this might be the case, “ You certainly can’t walk in and rob a bank without getting arrested, so it’s a lot easier for guys to be able to sit in their bedroom, through VPN and TOR and these kind of things and really try to make it difficult for law enforcement to track them by traditional means,” said Morginn.
Due to coronavirus, the world has been turning to digital solutions which has unfortunately made the internet an even larger hotbed for cybercrime. That being said, we will leave you with one final piece of advice. Whenever money is at stake, you should always do your own research. If you don’t understand how an investment works or you don’t know who you are investing in or with, it is better to not invest at all.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.