Like it or not, fraud prevention in the cryptocurrency space must be an ongoing personal exercise, even after regulation embraces the industry in a more material way. One only look at the retail forex trading industry to understand that fraud is still a major issue, even after two decades of retail trading activity and regulatory oversight. We tend to fall too easily for the conman’s siren call on the Internet, perhaps, because we cannot see him eye-to-eye, but also because the crooks today are very adept at persuasion and setting traps for our unsuspecting natures. One must be ever vigilant, skeptical, and aware.
Prevention always begins with awareness. Previous articles have built a framework upon which to build that awareness for fraud in this industry. Crooks are clever, well organized, and well capitalized, as well. They use the latest technologies, which tend to be one step ahead of legislators, regulators, and law enforcement officials. If you accept the forms discussed and learn to curb your own greed and gullibility, then you can move to the next step, which is serious due diligence.
According to industry experts, these few tips, related primarily to ICOs, but also applicable to other cryptocurrency investments, as well, may help guide your due diligence process:
Lastly, the words of CFTC Commissioner, Bart Chilton, may give you pause: “Potential investors should understand that while the crypto space, including ICOs, is exciting and can hold some potentially profitable opportunities, they are not traditional investment-grade opportunities. They hold, generally, greater risk and are a haven for bad actors. Investors should do deep due diligence to ensure their hard-earned money isn’t lost to some sleazeball.”