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US SEC Issues Warning on Crypto Investment Scams Citing ‘Some Investors May Have FOMO’

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US SEC Issues Warning on Crypto Investment Scams Citing ‘Some Investors May Have FOMO’

US SEC Issues Warning on Crypto Investment Scams, Citing 'Some Investors May Have FOMO'

The U.S. Securities and Exchange Commission (SEC) has issued a warning about fraudulent investment schemes involving cryptocurrencies. The regulator notes that some investors may have fear of missing out (FOMO) given the rise in prices of some crypto assets in recent years.

SEC Warns Investors of Crypto Scams

The U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) and Division of Enforcement’s Retail Strategy Task Force (RSTF) issued an Investor Alert on crypto investment scams last week.

The notice explains that “Fraudsters continue to exploit the rising popularity of digital assets to lure retail investors into scams, often leading to devastating losses,” adding:

Some investors may have FOMO [fear of missing out], given the rise in price of some digital assets in recent years, that they will miss an opportunity to become very wealthy.

The notice outlines some warning signs of a scam. “Guaranteed high investment returns … with little or no risk” is a classic warning sign of fraud. Fraudsters may even post bogus historical returns on their websites to show high investment returns, the SEC detailed.

Another sign is that sellers are unlicensed or unregistered. The SEC stated that “Unlicensed, unregistered sellers commit much of the securities fraud targeting retail investors in the U.S.”

In addition, fraudsters often fabricate investment returns to entice investors. The SEC also warned that “If an investment ‘opportunity’ sounds too good to be true, it probably is.”

Lastly, the notice warns of “fake testimonials.” The SEC emphasized that investors should never rely solely on testimonials when making an investment decision, elaborating:

Fraudsters sometimes pay people – for example, actors to pose as ordinary people turned millionaires, social media influencers, and celebrities – to tout an investment on social media or in a video.

What do you think about this SEC warning about crypto scams? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Kenyan Fintech Player: ‘Banking the Unbanked’ Is the Most Important Use Case for Digital Currencies in Africa

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Kenyan Fintech Player: ‘Banking the Unbanked’ Is the Most Important Use Case for Digital Currencies in Africa

The year 2020 may well go down as the year when blockchain technology and cryptocurrencies, in particular, gained mainstream recognition. The restrictions on movement, as well as the widespread fear of catching a virus, forced many to look for alternative ways of making payments or sending remittances. This search for an alternative inevitably led many to crypto. Although the use of such alternatives to fiat cash continues to grow, many of the intended beneficiaries in places like Africa are still unable to use such digital currencies.

Kenya’s Kotani Pay Addresses Lack of Crypto Access

The lack of smartphones, misinformation about cryptocurrencies, and poor net connectivity are some of the main reasons why the number of digital currency users is not growing as some crypto proponents would have wanted. As a consequence, some players in this space are now working hard to find solutions to help those that presently cannot use digital currencies.

One such player is Kotani Pay, a Kenya-based fintech start-up that is focused on providing a reliable blockchain on-ramp and off-ramp service for users in Africa. Bitcoin.com News recently reached to the start-up’s CMO, Brian Kimotho, to learn more about Kotani’s offering. Below are Kimotho’s written responses to questions sent via WhatsApp.

Bitcoin.com News (BCN): When was Kotani Pay established and why?

Brain Kimotho (BK): Kotani Pay was established in 2020. We built Kotani Pay after realizing for a very long time that the people who were set out to benefit the most from the promise of Blockchain and Web3 technologies had no way of interacting with the services offered. Most of these users don’t have smartphones or an internet connection. They only have feature phones. The most they can do is communicate via texting or making phone calls. Kotani Pay is built with this in mind. To access the service one simply needs to dial the Unstructured Supplementary Service Data (USSD) code. Once dialed, the user is presented with a simple menu where they can make their preferred selection — send money, withdraw…

BCN: You are currently involved in efforts to provide the so-called universal basic income (UBI) to refugees. Can you tell our readers what motivated your company to become involved in this?

BK: Serving the refugees in collaboration with Impact Market, Refugee Integration Organisation and Mission Possible 2030 was in line with our goal of making Web3 technologies accessible to the last mile. In Africa for example, the total number of mobile phone users stands at 700M. Out of these 700 million users, only 260 million have internet-enabled smartphones. Kotani Pay, through projects such as the UBI for refugees, is able to realize its goals for empowering the remaining 440 million people who are using feature phones.

BCN: How many refugees are now benefiting from this UBI initiative?

BK: 2000 with an additional 4000 in the pipeline.

BCN: On your website, you tout Kotani Pay as “Africa’s most reliable blockchain on-ramp and off-ramp service.” In exactly how many countries do you provide this service?

BK: The Kotani Pay USSD service is powered by the Kotani Application Programming Interface (API). With this API, businesses can integrate their processes to our off-ramp service to serve mobile phone (smartphone and feature phone) users in Africa.

BCN: From your perspective, what would you say is the most important use case for digital currencies in Africa?

BK: Banking the unbanked.

BCN: You provide an on-ramp and off-ramp service on a continent where most countries have either banned or imposed some form of restrictions on digital currencies. How are you managing to provide this service and still not violate regulations in countries where you operate?

BK: We are fully compliant with the Payments Services Act and banking regulations in Kenya. We work via banking APIs regulated by the Central Bank of Kenya for user AML/KYC due diligence. Beyond that, we provide the service leveraging stablecoins on the Celo network pegged to the value of the dollar and euro. The stablecoins are backed by other verifiable assets making them less volatile to price fluctuations.

BCN: Countries like Ghana and Nigeria are proceeding with plans to launch central bank digital currencies (CBDC) while many other countries plan to do the same in the near future. In your opinion, are CBDCs something that the crypto industry should be afraid of?

BK: No, CBDCs are not something we should be afraid of. The CBDC use case goes to show the possibilities of what Web3 and Blockchain have to offer. CBDCs present several benefits including low barriers to entry for users, lower cost of minting money as well as low cost of cross-border and interbank transactions.

What are your thoughts on this interview? Tell us what you think in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Skybridge Capital’s Scaramucci on Crypto Boom: ‘The Institutions Are Not There’

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Skybridge Capital’s Scaramucci on Crypto Boom: ‘The Institutions Are Not There’

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Anthony Scaramucci, CEO of Skybridge Capital, a multi-asset class investment firm, says he thinks the institutional investment boom in cryptocurrencies has been greatly exaggerated. In an interview given to Bloomberg last week, Scaramucci stated that most institutions are still not interested in cryptocurrency as an investment and that only 10% are actively investing in crypto.

Anthony Scaramucci Thinks Institutions Are Still Not Big on Crypto

Anthony Scaramucci, CEO of Skybridge Capital, thinks there is still a long way until bitcoin and cryptocurrencies are embraced by institutional investors. In an interview offered to Bloomberg, Scaramucci stated that, according to his experience, only 10% of the institutional world is actively investing in cryptocurrency. While this may be a minority, according to Scaramucci, it’s a minority that has some impact. The Skybridge Capital founder says the situation feels like a “feeding frenzy.”

The investor stated:

The institutions are not there. Anybody who’s telling you there’s institutional adoption into this space is not being totally honest – or they’re seeing something that I’m not seeing.

This line of thinking holds that the whole cryptocurrency bull market has been pushed mostly by retail investors and that when institutions really do enter the crypto space, they will give it a massive boost. However, instruments like ETFs will play a major role in achieving this goal.

Defi and the Future of Institutional Investment

Decentralized finance has been one of the big topics that have driven the cryptocurrency market this year. The ability to transact and access financial services without a middleman is a key feature of the sector. Scaramucci thinks this might attract more institutions into the space in the long run.

But this being as it may, institutions still have reasons to be wary of investing in cryptocurrencies. Some maintain there is no clear regulation in the sector, something that has been criticized by many actors that are currently facing lawsuits in crypto-related cases, like Ripple. This month, Coinbase, one of the leading U.S.-based cryptocurrency exchanges, was stopped in its tracks by the SEC when it intended to launch a crypto-based lending product. The latest Chinese crypto ban also affects the perception that investors have of these instruments.

In any case, there has been an increase in attention to cryptocurrency from big institutional firms like Goldman Sachs, JPMorgan, and Fidelity, among others, that have started offering crypto services to their customers.

What do you think about Anthony Scaramucci’s opinion of institutional investment in cryptocurrency? Tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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JPMorgan Boss Jamie Dimon: ‘If You Borrow Money to Buy Bitcoin, You’re a Fool’

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JPMorgan Boss Jamie Dimon: ‘If You Borrow Money to Buy Bitcoin, You’re a Fool’

Jamie Dimon, the CEO of one of the biggest financial institutions of the world, JPMorgan, has once again let the world know about his stance on bitcoin and cryptocurrencies. Dimon stated that whoever borrowed money to purchase bitcoin was, in his opinion, a “fool.” However, his personal opinion has not clashed with the fact that JPMorgan is now offering access to six cryptocurrency funds for its customers and even created its own digital ledger token for payments, called JPM Coin.

Jamie Dimon Blasts Cryptocurrencies

JPMorgan’s CEO Jamie Dimon blasted crypto and bitcoin yet again. The JPMorgan executive argued about the real value of cryptocurrencies and his take on the cryptocurrency world in an interview with the Times of India last week. Dimon stated that the latest bull market in cryptocurrencies was created by a lot of liquidity in the system, which then leads to speculation. Dimon declared:

I am not a buyer of bitcoin. I think if you borrow money to buy bitcoin, you’re a fool.

However, Dimon also acknowledged there is the possibility that the cryptocurrency sector could increase its value tenfold in the next years.

Regulation and JPMorgan Offerings

Dimon was also asked about how he believes regulations will affect cryptocurrencies in the future. While he stressed bitcoin was not its main interest, Dimon did state that he believes governments will regulate bitcoin at some point in time. He explained:

It is going to be regulated. Governments regulate just about everything. I don’t know if it’s an asset. I don’t know if it’s foreign exchange. I don’t know if it’s a currency. I don’t know if it’s the securities law. But they’re going to do it.

However, the personal opinions of Dimon about the validity of cryptocurrency and the coming regulation of the cryptocurrency market have not affected JPMorgan’s business moves into crypto. In fact, the company is now more open to cryptocurrencies than it was two or three years ago. In August, the firm informed they would allow its customers to access six cryptocurrency-based investment funds (Grayscale’s Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, and Ethereum Classic Trust, and the Osprey Bitcoin Trust).

Also, the company has dipped its toes when it comes to digital currencies. In October 2020, JPMorgan announced the creation of “JPM Coin,” a network that would allow its customers to make instantaneous payments using blockchain technology.

What do you think about Jamie Dimon’s remarks about bitcoin? tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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