Thinking of investing in Bitcoin? Ether? Or even Dogecoin? (Yes, there really is a cryptocurrency based on the Doge meme).
Well, before you pour hundreds or thousands into this investment, you should probably do your homework on the digital asset, as you might just fall prey to a scam.
SPF Warns of Increasing Cryptocurrency Investments Crimes
The number of crimes linked to cryptocurrency investments are on the rise, according to the police.
In 2018, only 15 reports of such cases were lodged. This number than shot up to 125 in 2019, and to 393 last year.
These cases included cheating, fraud, and other crimes, the police told ST.
In these three years alone, a total of $29 million had been lost.
So, why are such crimes on the rise?
Lack of Regulation and Proper Research
One of the reasons many people invest in cryptocurrency is that it’s unregulated by governments or banks.
But as Mr Anthony Lim – the director of Centre for Strategic Cyberspace and International Studies – pointed out, this is precisely why many scammers are using it in their schemes.
When news that the price of a certain cryptocurrency is surging, investors are quick to pour their money in, hoping to make a quick buck.
And this desire is what scammers exploit.
Another reason that many investors fall victim to such scams is that they don’t do their research on cryptocurrency before investing.
“We are talking about thousands of dollars of one’s hard earned money here; vigilance and due diligence is the least they could do before plunging,” Mr Lim said.
Due diligence here includes understanding how cryptocurrencies work, knowing the person or company offering the deal, and ensuring the seller has been approved and legitimised by the Monetary Authority of Singapore (MAS).
MAS has actually cautioned against investing in cryptocurrency, as it’s a risky investment and not suitable for retail investors.
Red Flags to Look Out For
If you’ve done your due diligence and still intend to invest in cryptocurrency, then there are a few red flags you should look out for first:
- The promise of quick and substantial profits (if it’s too good to be true, it probably is)
- Non-responsiveness from the company selling the cryptocurrency when asking questions
- A lack of publicly available credentials of the company and its representatives
One way to ensure the company you’re handing your money over to is legitimate is to check the Financial Institutions Directory, which is a list of MAS-regulated financial institutions and the regulated activities they are authorised to provide.
Remember, scammers are constantly thinking up new ways to make you part with your hard-earned money. We need to keep up with them.
Check out this list of other scams you should be aware of.
Featured Image: Jaruwan Jaiyangyuen / Shutterstock.com
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