Cryptocurrency, or crypto, is virtual or digital assets purchased with real money ($, £) traded on blockchain technology. It does not have all the values of real or fiat currencies. Cryptocurrencies, like Bitcoin and Ethereum, are different from stocks and real money. Crypto is not regulated like stocks or insured like real money in banks. Crypto’s high risks can offer big rewards or huge losses.
Did You Know that Minority Investors are Often Targeted by Crypto Scammers?
In a recent Pew Research Center survey, 24 percent of Asian adults and 21 percent of Black or Hispanic adults say they have invested in or used a cryptocurrency, compared with just 14 percent of White adults. Overall, data shows 17 percent of U.S. adults fall into one of these categories.
Black investors are also more likely thanwhite investors to believe investments in cryptocurrency are both safe—33% vs. 18%—andregulated by the government—30% vs. 14% (Ariel-Schwab Black Investor Survey).
Crypto targets young minority investors through social media under the guise of “democratize finance” that removes barriers of invasive credit checks or income requirements promising high returns to build wealth (CNN).
DC Residents Should Beware of Crypto Scams
Crypto Wiped Out $2 trillion in 2022 (World Economic Forum).
If it sounds and looks too good to be true, it could be a scam. Beware of investment opportunities that use phrases like Get Rich Quick, Don’t Miss Out, High Returns Guaranteed, Buy Digital Coins Now.
Avoid unsolicited offers on CashApp or social media.
It could also be a scam if you are told “it’s as good as cash.” Crypto is not protected or regulated like cash or the U.S. dollar.
Crypto is volatile and a substantial risk. Invest only what you can afford to lose.
Crypto scammers are experts at getting you to buy their digital assets.
Be wary of “finfluencers” who get paid by crypto companies whether you lose money or not.
DISB has taken Actions Against Crypto Companies and Exchanges to Protect Residents
Index funds can outperform cryptocurrencies. And while index funds don’t guarantee profits (no investment does), they are less risky and more appropriate for most investors.
If you believe you have been the victim of a cryptocurrency fraud, you may file a complaint with the DISB Enforcement and Consumer Protection Division at 202-727-8000 or request assistance here. You may also contact the U.S. Securities and Exchange Commission at sec.gov/oiea/Complaint.html.
District of Columbia Department of Insurance, Securities and Banking
Office of Communications 1050 First Street NE, Suite 801, Washington, DC 20002
DISB Mission Our mission is three-fold: (1) cultivate a regulatory environment that protects consumers and attracts and retains financial services firms to the District; (2) empower and educate residents on financial matters; and (3) provide financing for District small businesses.
