US States Issue Warnings Over Cryptocurrency Investments

The American states of Idaho and Alaska have both issued warnings over investments involving cryptocurrencies.

AccessTimeIconJan 5, 2018 at 12:00 p.m. UTC
Updated Sep 13, 2021 at 7:20 a.m. UTC
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The American states of Idaho and Alaska have both issued warnings over investments involving cryptocurrencies.

Idaho's Department of Finance warned its people on Thursday to deal cryptocurrency investments with caution. It said that a survey by the North American Securities Administrators Association (NASAA) has reported that 94 percent of state and provincial securities regulators believe that bitcoin and other digital currencies involve "high risk of fraud."

Gavin Gee, director of the Idaho Department of Finance, said that unsuspecting investors get tempted by the recent wild price fluctuations and speculation surrounding cryptocurrencies and rush into investments that they don't understand fully.

Gee stated:

"Cryptocurrencies and investments tied to them are high-risk products with an unproven track record and high price volatility. Combined with a high risk of fraud, investing in cryptocurrencies is not for the faint of heart."

Cryptocurrencies are susceptible to cybersecurity breaches or hacks and the high volatility of such investments makes them unsuitable in sizable amounts for many investors, the note stated.

The Department of Finance also reminded investors to keep an eye out for common red flags of investment fraud, including unsolicited offers, unlicensed sellers and guarantees of high returns.

The state of Alaska has also released a statement urging the public to view cryptocurrency investments with caution.

Kevin Anselm, director of the state's Division of Banking and Securities, said that cryptocurrencies "aren't a typical investment." She emphasized that people have to understand the risks of investments, such as hacks or fraud, and what the offerer is giving in return, a local news media report said.

Anselm added that there has been a rise in reports of Alaskans being asked to buy new cryptocurrencies.

Warning light image via Shutterstock

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