Latvia’s Financial and Capital Market Commission (FCMC) issued a warning on Monday against the growing frauds with digital currency investment schemes that are targeting victims on various channels.
The regulator specified that advertisements about crypto investments on the internet are mostly frauds. These schemes offer high-interest rates for short-term investments luring many potential victims.
Additionally, fraudsters are impersonating regulated companies to trap potential victims. Other European regulators are constantly flagging such clone platforms.
“Fraudsters tend to advertise cryptocurrency investments on the internet, sometimes using the names and images of well-known individuals or licensed companies,” the Latvian regulator stated (translated from Latvian).
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These platforms look legitimate and prompt potential victims to share their contacts so that they can approach them with bogus offers. Many of these fraudsters even sell non-existent cryptographic assets to push them for further investment.
“Such fictitious companies may offer you investments in bonds, stocks, Forex currency products, and cryptocurrencies that are not traded on a trading venue are worthless, exaggeratedly priced or do not even exist,” the regulator stated.
Cryptos Need Regulations
The FCMC further clarified that the issuance and circulation of digital currencies are not regulated in Latvia, and that is allowing many of these scammers to spawn. However, some crypto investment instruments, including contracts for differences (CFDs), are regulated in the country.
It urged investors to become vigilant against these fraudulent platforms and become cautious before any cryptocurrency investments.
“In the interests of investor protection, the FCMC warns against such possible fraud schemes and urges investors to be vigilant, as cryptocurrencies operate in an infrastructure that is currently characterized by lower regulation than in the financial and capital markets,” the FCMC stated.