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Texas regulators warned investors of cryptocurrencies as they added this emerging new asset class to the list of top threats.
The Texas State Securities Board has released its “Texas Investor Guide: Strategies for Investing Wisely and Avoiding Financial Fraud”. In the latest edition, they added cryptocurrency as among the investments that investors should think twice about. According to the document, cryptocurrencies are volatile and they are not easy to comprehend especially for traders who are not professionals.
“Investments tied to cryptocurrency hit everyone’s radar in 2017 when the price of one bitcoin reached a record high of $19,891, an increase of 1,800% for the year. But less than two months later, the price had dropped to $6,846. Cryptocurrency prices continue to be in a constant cycle of boom and bust,” the document read.
Based on the report, promoters of these investments take advantage of people who are easily swayed by the idea of virtual currencies being the quick path to wealth. Seniors and retirees, who traditionally prioritize security over speculation, are common targets to invest in cryptocurrency mining pools.
To avoid falling victim to cryptocurrency fraud, the Texas regulator recommended to not invest unless one can determine some basic facts about the company. Also, it is very important to identify the principals of the company including its physical location. Most importantly, one should seek for audited records or other financial information that will support the high profits that it claims.
“The state of Texas’ rigorous registration requirements applies equally to traditional securities and emerging securities, including products tied to cryptocurrencies. Keep in mind that you will have little or no recourse if your money is stolen,” the document added.
Meanwhile, the Indian Supreme Court delayed the hearing against the Reserve Bank of India (RBI) for the crypto banking ban imposed by the central bank in 2018.
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