A North American Securities Administrators Association (NASAA) survey reveals that securities regulators believe crypto scams to be the biggest threat to the market in 2022. Crypto scams can be particularly devastating as the market experiences greater adoption.
Members of the North American Securities Administrators Association (NASAA), a body made up of securities regulators in the United States, believe that cryptocurrency scams are among the biggest threats to investors currently. The organization detailed the results of a survey on January 10, and it was clear that these members saw crypto scams as a major concern in 2022.
Cryptocurrency scams came out at the top of the list with regard to investor threats, followed by scams and other methods of fraud. Along with these results, NASA also published some guidance for investors to protect themselves from scams and fraud.
Enforcement Section Committee co-chair Joseph P. Borg, director of the Alabama Securities Commission, said of the crypto scams,
So far, NASAA’s securities regulator has disclosed that investments related to cryptocurrencies and digital assets are the top investor threats to us. The stories of ‘crypto millionaires’ attracted some investors to invest in cryptocurrencies or crypto-related investments this year, and with them, many stories of big bets and big losers began to emerge, and they would appear in 2022. Will stay
As mentioned in the announcement, crypto scams usually involve criminals offering high returns in exchange for money, and education and awareness were the way to prevent this. It notes that the lack of clear regulation also makes it difficult to deal with scams in the space.
The threat of scams has long been a topic of discussion in the crypto space and regulators. Many of these scams took place in the DeFi space, with Chainalysis reporting that around $14 billion was stolen in 2021.
All eyes on scams and investor protection in 2022
The two biggest scams in 2022 were the squid game coin and the Africrypt exchange debacle. The latter was particularly devastating, with more than $3.6 billion stolen. NFT Space is no exception to this trend, with one bored app NFT collector saying he was scammed through Discord.
The DeFi market is a prime target for malicious groups as it sees huge inflows of capital. Some projects have taken steps to ensure this doesn’t happen, including making audits mandatory and working with insurance protocols.
Regulators are also upping their game by making investor safety a top priority. High level officials have spoken. Recently, UK lawmakers called for more crypto regulation to protect investors, while the SEC has long been noted to prioritize it.