DATCP Says Think Hard Before you Invest in Cryptocurrency

Wednesday, October 12th, 2022 -- 10:54 AM

(Raymond Neupert, WRN) Before you decide to buy bitcoins or invest in an NFT or other cryptocurrency, be careful.

October is Cybersecurity Awareness Month, and the state division of consumer protection reminds people to think very hard before investing in NFTs or cryptocurrency. Michelle Reinen with DATCP says that while supporters may tout cryptocurrency as safe and secure, it's pretty vulnerable. 

"It's not backed by any central authority, like the FDIC or specifically governed by regulations, which while part of its appeal, for some users can result in a lack of support should there be a theft or fraud."

Reinen says that despite the name, it's not actually a currency, but rather a commodity, something you invest in rather than spend. "Risks can include those scam cryptocurrencies, which solicit huge early investments, but they end up shutting down forever, and only the creators pocket the money."

Reinen says cryptocurrencies are often the preferred method of trading value between criminals. "Risks also include artificially inflated prices due to 'wash trades', where a single entity is both the buyer and the seller. So there can be money laundering involved, pump and dump, and pyramid schemes."

Reinen says that you shouldn't ever invest more money than you're willing to lose and realize that cryptocurrency has been steadily losing value across all markets since the start of the year.

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