Wisconsin working to stop fraudulent cryptocurrency schemes
MADISON — Wisconsin is joining securities regulators across the U.S. and Canada to crack down on fraudulent cryptocurrency-related investment schemes, while also warning the public of their risks.
“Operation Cryptosweep” will focus fake investment products and schemes that guarantee high returns on investments in cryptocurrencies, which are digital currencies such as bitcoin, Wisconsin Public Radio reported.
While some investments may be legal, investors should research products before investing, said Joseph Borg, head of the North American Securities Administrators Association, which is launching the operation.
“Mainstreet folks have to take the time to investigate before they invest and one way to do that is to contact your state regulator to see if in fact these folks are licensed and registered,” he said.
Regulators in North America have launched almost 70 investigations into cryptocurrency-related investments since May.
Wisconsin hasn’t seen any such schemes, but regulators want to get ahead of the problem, said Robin Jacobs, with the state’s Division of Financial Institutions.
“There are very few legitimate ways to make 10, 15, 20 percent off your investment,” she said. “And if they’re offering you guaranteed high returns, do not give them your money. You can call DFI and ask us to review it and see if it sounds legitimate.”
Investors are unlikely to get their money back if they fall for one of the schemes, regulators said.