The United States Securities and Exchange Commission (SEC) published a new alert about investment scams related to digital assets and cryptocurrency.
The announcement shared by the SEC’s Office of Investor Education and Advocacy and Division of Enforcement’s Retail Strategy Task Force highlighted the “devastating losses” faced by the retail investors due to scams.
The SEC attributed the “rising popularity” of initial coin offerings, including cryptocurrencies, coins, and tokens, as the main reason for growing scams and exploits.
The SEC also said that the price surge of certain digital assets has been a key factor for scammers to lure unsuspecting investors:
“Investors may be less skeptical of investment opportunities that involve something new or ‘cutting-edge,’ or may get caught up in the fear of missing out (FOMO).”
Investors’ FOMO is mainly attributed to the recent bullish performance shown by numerous tokens and nonfungible token initiatives. The alert acknowledges that one of the main reasons for FOMO among investors is the mindset that “they