Bitcoin and other digital currencies are not issued by banks or the government, despite the emergence of new exchanges claiming to be licensed and regulated by federal, state or other jurisdictional authorities. Due to a lack of consistent guidelines, scammers have taken advantage of the confusion and contradictions to misinform potential investors.

Kander previously halted a Bitcoin scam in Springfield after Kenneth Slaughter used deceptive tactics to convince online investors to pay for the development of Bitcoin mining equipment. (Mining is the process of solving complex math problems to earn Bitcoins.) Slaughter told investors theyd see unrealistically high returns of 2,812 percent, yet failed to inform investors of any associated risks.

As Bitcoin and other digital currencies attract the attention of private companies and regulators, investors should be aware of the following when approached with potential investment opportunities:

• Digital currency value fluctuates wildly because it is decentralized and often the subject of breaking news and rumors.

• Hackers are attracted to digital currency because its tangible, can be difficult to trace and can be vulnerable to cyberattacks.

• Many fake Bitcoin exchanges exist, and because all payments are irreversible, completed transactions cannot be undone.

Go Back

Comments