By Secretary of State Elaine F. Marshall
Cryptocurrency is once again in the headlines – this time as a result of U.S. sanctions in connection with alleged money laundering. The fact is that cryptocurrency hasn’t strayed far from the headlines for a few years now,
and the fascination surrounding it has made it a fixture of investment scams as con artists use what’s in the news to draw in victims and separate them from their money.
Concerns about global inflation and a possible recession have led more seniors to wonder whether they should consider investing in cryptocurrency, but its volatility should be a concern for everyone, especially retirees in need of a high degree of financial stability.
Part of the allure of cryptocurrency has been a lack of regulation, but that also makes cryptocurrency-related investments higher risk. The North Carolina Secretary of State’s Office was just the second state securities regulator in the nation to take enforcement action against cryptocurrency investment programs, issuing two administrative orders in 2018 to halt crypto-related programs that posed a financial danger to North Carolina’s investing public.
Cryptocurrency is a digital currency that generally exists only electronically. It’s not issued or backed by the U.S. government, and therefore does not have the guarantees and protections we commonly expect. Just as it’s important to understand the business model behind any investment you’re considering, it is absolutely crucial to understand how any investment in cryptocurrency works and generates profits.
Here are the two important messages to remember when considering any investment deal: If it sounds too good to be true, it probably is – and always ask before you invest. So be vigilant in doing your own research to be sure you understand the risks in any investment before committing to it.
Most importantly, call our NC Investor Hotline at 800-688-4507 before making any investment. Our Securities Division staff can tell you if the person making an investment offering is registered to sell securities in North Carolina, and whether the investment offering itself is registered. If either the individual or the offering is not registered, it would be wise to keep your hands on your money and walk away.
The Secretary of State’s Office also offers workshops around the state covering news you can use, from how to recognize the signs of investment fraud to information to help new businesses navigate state regulations, and information about our Department’s secure, online registry for advanced health care directives. Don’t hesitate
to reach out to us at secdiv@sosnc.gov if you’re interested in scheduling a workshop for a group in your community.
