SEC warns of rising crypto and tech investment scams

The U.S. Securities and Exchange Commission (SEC) has raised concerns about increasing cryptocurrency scams and other investment frauds during World Investor Week 2024, which runs from October 7-13.

The SEC pointed to the dangers posed by aggressive financial marketing, AI, social media, and emerging technologies, which often mislead unsuspecting investors.

Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy, explained that the hype around technologies like AI and cryptocurrencies makes it difficult for investors to find reliable advice.

She said, “Hype around emerging technologies such as AI, finfluencers, social media, and aggressive investing marketers can make it challenging for investors to know where to turn for help.”

The SEC warned of several common scams, including "relationship investment scams," cryptocurrency fraud, and financial grooming.

These scams have become more prevalent as technology evolves and investment markets shift.

As part of World Investor Week, a global initiative led by the International Organization of Securities Commissions, the SEC is working alongside other financial organizations to promote investor education and fraud prevention.

The SEC is collaborating with the Commodity Futures Trading Commission (CFTC), FINRA, and other regulatory agencies to help investors recognize and avoid scams.

SEC Chair Gary Gensler stated, "Investor protection is at the very core of the SEC’s three-part mission."

Throughout the week, the SEC will focus on addressing current fraud trends, including cryptocurrency-related scams and financial grooming schemes, aiming to safeguard the financial well-being of investors.