Posted on February 20, 2019 at 8:52 AM

Be Extra Cautious, FBI Sending Out Warnings of Scam ICO Schemes

There is one rule when an investment sounds like it is just too good to be true. Back off or be careful. This is a warning that comes from the FBI, and it is a warning that should be heeded. Especially when it comes to scamming ICO schemes.

Cryptocurrency and investing cryptocurrencies have become big business and you may have heard about people making a lot of money, or losing a lot of money, through cryptocurrencies and crypto investments. Those people that have made money are smiling all the way to the bank, but investing in cryptocurrencies is not always that easy.

ICO, an Initial Coin Offering, also known as an Initial Currency, is a type of investment that uses cryptocurrencies. A set amount of cryptocurrency is sold as coins or tokens, to investors, in exchange for other cryptocurrencies. Such cryptocurrencies could be Bitcoin or Ethereum, but there are numerous on the market.

Threads of inconsistency have been discovered by the FBI, The American Federal Bureau of Investigation, where they have uncovered fraudulent behavior, or scams with ICOs, that follow certain behaviors. Such inconsistencies or scams often include an individual or so-called ‘investor’ misrepresenting his ability to invest in cryptocurrency. He may be unable to fulfill his claims of investment possibility and he may be making unrealistic claims in terms of high profit.

Again, as per an FBI interview in the Netherlands, it sounds too good to be true, it probably is too good to be true. A dramatic increase in cryptocurrency and ICO scams has been noted by the FBI in the past two years. This does not mean the scams are decreasing; it is quite the opposite. Scam artists are aware of the FBI investigations and findings and are constantly ‘upping their game.’ They find new scams and new ways to make you, the investor, believe you have found the deal of a lifetime.

As an investor or a potential investor in ICOs, the warnings from the FBI are clear. Be very careful. Always look into your investment broker or professional, make quite sure they are a legitimate investment broker or professional, do your own research, get reviews or references from other investors, and make calculated decisions. Cryptocurrencies have been known to give hard, fast and favorable returns on investment, which is why so many people are keen on ICOs. But, as we can see from the Bitcoin market, the graph does show significant ups and downs. And not every cryptocurrency is a Bitcoin or an Ethereum.

As an investor, there are rules that you can follow. Rather than being impulsive and potentially getting ripped off or scammed, do your due diligence. Look carefully into any scheme. Find out who are the people behind the scheme and look into their reputation. If an ICO is solely internet based, and many are, ask all the relevant questions. Check the answers. If you feel uncomfortable, do not invest.

There are services that help the public and general investors, whether old and experienced or brand new in the crypto market. One of these is the Monetary Business Regulatory Authority where you have the rights to ask for a broker check. By going through this authority, you can get the registration and the identity of the broker or entity.

Traders in Forex or Cryptocurrency, are by law, required to register. Those traders or brokers who do not register are breaking the law. It’s as simple as that. Do your homework and check on your ICO investor and ensure that he or she has all the right qualifications and a good reputation.