California Attorney General Xavier Becerra issued a consumer alert warning about scams involving digital assets or cryptocurrencies such as Bitcoin. He said there has been a push from fraudsters to offer schemes involving digital assets to persuade consumers and investors to offer up their cash in hopes of earning far more in return.
Becerra warned that the scams are taking many forms, with the same goal of separating people from their money. He urged consumers and investors to always research the company and its claims.
He highlighted recent examples of unscrupulous actors having impersonated well-known politicians, celebrities, and business executives on social media and YouTube channels in “giveaway” scams that falsely promised, for example, to double any digital assets sent to a specific digital asset wallet.
These schemes are attempted by scam artists to capitalize on novel technologies in order to rob Californians of their hard-earned savings, Becerra noted.
He warned about several types of scams involving digital assets such as fraudulent coin offerings, fake exchanges and wallets, ponzi schemes, pyramid schemes, mining scams, and digital assets as an alternative form of payment.
“These are just some examples of the tactics scam artists have used to take advantage of the buzz around cryptocurrency and other digital assets,” Becerra said.
Becerra urged investors to be especially wary of some of the red flags to avoid falling victim to digital asset scams.
The red flags are unrealistic profit claims, vague and anonymous offerings, special deals or giveaways, programs that reward recruitment of other investors, offerings or deals that pressure you to invest right away, exchanges and wallets that do not have a proven track record, and any claim or deal that just seems too good to be true.
Becerra noted that digital assets are new technologies that currently have fewer regulatory safeguards and higher volatility than many other investment products. He added that the California Department of Justice is committed to safeguarding consumers and investors in this evolving market.
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