Virtual currencies are common in Ponzi schemes. If you've been victimized
by investor fraud, contact Meyer Wilson at 888-390-6491
for a free consultation.
The Security Exchange Commission (SEC) is warning investors about fraudulent
investment schemes that use virtual currencies. Ponzi scheme fraudsters
often use virtual currencies as an easy way to deceive potential investors.
Ponzi schemes are investment scams that prey on potential investors.
Ponzi scheme fraudsters promise to invest an investor's funds in opportunities with little
risk and high financial returns. However, rather than investing in legitimate
money-making opportunities, they use the funds from new investors to pay
returns to existing investors, as well as themselves. Every year in the
U. S., thousands of eager, unsuspecting investors fall victim to Ponzi
schemes and turn to a securities litigation attorney to
Ponzi scheme fraudsters use the latest technological innovations to entice
investors. Virtual currencies, such as Bitcoin, are often used by fraudsters
because they provide an easy way to hide real assets. They can be used
to purchase goods and services online and easily traded on online exchanges.
Virtual currencies facilitate fraudulent transactions and investments
by providing fraudsters with less oversight of regulations and more privacy
benefits than transactions made with conventional currencies.
Red Flags for Investor Fraud
Many Ponzi schemes have red flags that can alert potential investors to
the possibility of fraud. Before investing, investors should do diligent
research and discuss investment plans with a securities litigation attorney
who can authenticate investments. Common red flags include:
Investments with Little Risk and High Returns: Investments offering high return rates usually have higher risks. Investors
should be skeptical of investments that generate consistently high returns,
regardless of market conditions.
Unlicensed Sellers and Unregistered Investments: According to federal and state laws, most investment firms and professionals
must be licensed or registered. Many Ponzi scheme fraudsters are unlicensed
and have investments that are not registered with the Securities Exchange
Commission or state securities regulators.
No Investor Qualifications: Most legitimate investment opportunities require accredited investors.
If questions are not asked to verify an investor's salary or net worth,
the investor should be suspicious of potential investor fraud.
Complex Fee Structures and Hidden Paperwork: Investments with complex fee structures that are hard to understand and/or
paperwork that's not accessible may be a deliberate attempt to confuse
an investor and hide investment details.
Difficulty Receiving Payments: Ponzi scheme fraudsters often encourage investors to reinvest promised
payments by offering higher investment returns. Difficulty receiving or
cashing returns on investments are a common red flag for investor fraud.