With the rise of cryptocurrency and the mystery surrounding it, it was only time before people started scamming other people. With the tech being new enough to not be fully understood by all, it is in your best interest to buy the coins from a source that is credible and trustworthy.
The SEC suggests that you do your own research about the company and ask around whether they are reliable or not. On top of that, they have also listed a few things to look out for and what can be considered as red flags.
SEC also says that people are gullible while investing in new-age techs like Crypto and NFTs so that they do not miss out on opportunities. This Fear of Missing out or FOMO as it is also known as is a well-established pattern of behavior that scamsters take advantage of.
Common red flags
Most of the red flags are usually like do not trust anyone who offers you to double your money or give you significant returns. Also, it would be foolish to buy coins in physical condition as these are online based coins.
It is also worthwhile to suspect people who say that the cryptocurrency they are pitching you is the new big thing. Name dropping is also a common tactic that they use to lure in potential investors.
In the end, if you are not comfortable investing your money in cryptocurrency then there is a chance that it is not the best option for you. Take notice of the aforementioned red flags and stay safe from being scammed.