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The United States Securities and Exchange Commission (SEC) has released an investor alert to alert the public of the prevailing menace of fraudsters who use cryptocurrencies securities for purposes of defrauding investors. 
Due to the growing popularity of <a href="https://coingape.com/crypto-scam-71m-wbtc-thief-returns-51-eth-seeks-victims-telegram/" rel="noopener noreferrer nofollow">digital currencies</a>, such scams have evolved into more elaborate forms using several deceptive strategies to defraud people.
<h2 id="sec-warns-of-crypto-asset-scams">SEC Warns of Crypto Asset Scams</h2>
The latest <a rel="noopener noreferrer nofollow" href="https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/crypto-scams">advisory</a> by the SEC notes that investors should be especially wary since fraudsters are using the promise of cryptocurrencies to perpetrate their schemes. These frauds typically involve the use of sophisticated technologies and social manipulation to give an impression of genuine investment products. 
Since fraudsters conceal their identities and engage in interactions with their targets through impersonation, it becomes challenging for authorities to track the flow of funds and recover stolen assets.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 NEW INVESTOR ALERT: 5 Ways Fraudsters May Lure Victims Into Scams Involving Crypto Asset Securities<a href="https://t.co/0Ag6l8hEbj" rel="noopener noreferrer nofollow">https://t.co/0Ag6l8hEbj</a> <a href="https://t.co/QsmSJvui1R" rel="noopener noreferrer nofollow">pic.twitter.com/QsmSJvui1R</a>
 — U.S. Securities and Exchange Commission (@SECGov) <a href="https://twitter.com/SECGov/status/1795865151133859852?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 29, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Social media platforms or direct messages are also warned to be notable <a href="https://coingape.com/lazarus-group-poses-fenbushi-capital-phishing-scams-lures-users-linkedin/" rel="noopener noreferrer nofollow">scams</a> to investors. These crypto scams usually involve the fraudster pretending to be familiar with the victim or giving an investment tip randomly. These scammers tend to take time grooming their targets before they ask the unsuspecting victims to invest in fake securities projects, and then vanish as soon as they have collected large amounts of money.
<h2 id="tactics-employed-by-scammers">Tactics Employed by Scammers</h2>
Scammers have also been observed to take advantage of emerging technologies such as artificial intelligence (AI) to lure investors. They set up fake websites and use <a href="https://coingape.com/elon-musk-deepfake-crypto-scam-raises-alarm-in-hong-kong-sfc-responds/" rel="noopener noreferrer nofollow">deepfake</a> to generate fake sound and video clips featuring celebrities or well-known officials to give the scams a fake endorsement.
Furthermore, the SEC has noted that pump and dump fraud is on the rise, especially in the context of low-quality or speculative coins such as memecoins, through which investors can lose a lot of money.
According to the SEC, another thing that investors need to be careful about are demands for extra payments for the unlocking or recovery of their investment accounts. These requests are usually accompanied by the promises that the person has to pay taxes and fees or to get through some regulation issues, which are actually just an attempt of the scammers to get more money from the victims.
<h2 id="preventive-measures-and-legal-actions">Preventive Measures and Legal Actions</h2>
The <a href="https://coingape.com/onecoin-crypto-scam-co-conspirator-bags-4-year-jail-term/" rel="noopener noreferrer nofollow">SEC</a> also encourages anyone interested in investing to undertake their research and consult accurate information, especially when investing in crypto assets. Some of the checks that should be conducted to ensure that any investment opportunity is legitimate include checking the identity of the people or companies offering the investment opportunity and the accuracy of their claims on the returns that one is likely to get from the investment.
In addition, the SEC and other regulators’ agencies remain active in seeking legal redress against the perpetrators of these scams. Besides, based on the evidence of continued attempts at the formation and denial of such services, authorities are also conducting awareness campaigns to make the public aware of the dangers of investing in crypto assets and the red flags of scams.
These warnings come in the backdrop of recent enforcement actions and criminal charges. The <a href="https://coingape.com/us-doj-charges-two-chinese-citizens-in-73-million-crypto-scam/" rel="noopener noreferrer nofollow">U.S. Department of Justice</a> (DOJ) recently filed charges against two Chinese citizens in a $73 million crypto scam, highlighting the international and complex nature of such frauds.
Also, the crypto space has experienced a new wave of hacks linked to Pendle yield tokens, with more than $10 million lost as a result of hacking attacks.
Read Also: <a href="https://coingape.com/ethereum-futures-on-cme-sets-new-monthly-record-in-may-after-eth-spot-etf-approvals/#:~:text=Ethereum%20Futures%20Set%20New%20Monthly,high%20on%20trading%20volume%20metrics." rel="noopener noreferrer nofollow">Ethereum Futures On CME Sets New Monthly Record In May After ETH Spot ETF Approvals</a>
The post <a href="https://coingape.com/sec-warns-investors-of-scams-in-crypto-asset-securities/" rel="noopener noreferrer nofollow">SEC Warns Investors of Scams in Crypto Asset Securities</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

SEC Warns Investors of Scams in Crypto Asset Securities

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