Sadly, many crypto investors delve into the crypto market without any awareness for the risk involved and no consideration that they may not see their finances again.
In addition, there is so much information out there to consider – many of whom only claim to be secure trading platforms. This creates a mind-field for new crypto investors as they do not know where to begin with a investment without getting caught out at the first hurdle. Online websites, social media, video and even telephone salespeople can all claim to know the best place to invest in crypto. Defining if they are legitimate or a scam is a real issue for potential crypto investors.
In addition, scam bots have become very clever at associating finance products such as crypto with celebrities to make them even more desirable to consumers. This gives the persona that they are legitimate even when they’re not!
Calls for better regulation for crypto investors
Recently Charles Randell, the chair of the Financial Conduct Authority, criticised influencers for being paid off by coin makers to ‘pump and dump’ tokens for their own gain. ‘Pump and dump’ is a term used in crypto to boost the coin to higher values and then quickly mine the profits. Sadly though, keen crypto investors who are not very clear of the situation can fall at its mercy by investing their own cash into coins that sometimes don’t even exist.
Further to this, Randell has called for better regulation over social media ads such as those used on Instagram which can be extremely misleading. With approximately 2.3m people in the UK now owning digital assets, the FCA have repeatedly warned that this isn’t necessarily the best way to invest and have encouraged people to be wary.
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