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The U.S. Securities and Exchange Commission (SEC) has warned against scammers taking advantage of investors’ fear of social media hijacking (FOMO).
SEC Says Scammers Are Frequently Using Social Media to Defraud Investors
The SEC’s Office of Investor Education and Advocacy warned that “scammers often use social media to defraud investors.” The securities regulator, encouraging investors to be skeptical and “never make investment decisions solely based on information from social media platforms or apps,” said:
Fraudsters may exploit investors’ fear of missing out to lure investors on social media into ‘crypto’ investment scams.
If “a crypto investment opportunity” sounds too good to be true, it probably is,” the SEC said. “Promises of high return on investment with little or no risk are classic warning signs of fraud.” The securities watchdog recommended that anyone considering investing in crypto assets or crypto-related investments “take the time to understand how investing works.”
According to blockchain analytics firm Chainalysis, illicit crypto volumes fell 15% in the first six months of this year compared to the previous year. Specifically, the firm said, “Total fraud revenue for 2022 is currently $1.6 billion, 65% lower in 2021 than at the end of July, and this decline appears to be linked to lower prices in different currencies.” said.