At a time when cryptocurrency is becoming increasingly popular, the risk of fraud and scams is also on the rise. The state of Wisconsin has taken a firsthand step to fight this issue by launching a new investment scam tracker.
The Wisconsin Department of Financial Institutions (DFI) announced in a press release the launch of an investment scam tracker on Tuesday, July 30. This tool is designed to primarily help Wisconsinites fish out and avoid financial investment scams, including those involving cryptocurrency. DFI Secretary Cheryll Olson-Collins stated, “Scammers are in the shadows using the public’s interest in crypto assets to take advantage of the most vulnerable Wisconsinites.” She further emphasized the department’s commitment to protecting consumers and investors through this new initiative.
Today @WIS_DFI announced it has launched an investment scam tracker to help Wisconsinites spot and avoid financial investment scams, including cryptocurrency scams. Learn more at: https://t.co/fS6aQj4Oyg. pic.twitter.com/Pw7KrLFwP6
— Wisconsin Department of Financial Institutions (@WIS_DFI) July 30, 2024
Between January 2022 and June 2024, a staggering $3,540,878 in losses were reported to the DFI from financial grooming and cryptocurrency fraud. These scams, often called “pig-butchering” or “financial grooming,” involve perpetrators investing significant time to gain investors’ trust before defrauding them. The Wisconsin government records show that 22 entries of such scams were made into the investment scam tracker from preexisting complaints in the last couple of days.
A snippet of Wisconsin DFI investment scam tracker entries. Source: dfi.wi.gov
How the Tracker Works
The investment scam tracker includes descriptions of fraudulent or deceptive scams based on consumer complaints reported to the DFI. While DFI has not verified the factual details and losses reported by complainants, they are being shared in the tracker to alert the public to potential threats.
The tracker is searchable by company name, scam type, or keyword, and it includes a list of frequently asked questions, a glossary of common investment scam-related terms, and links to additional investor resources.
Secretary Olson-Collins urged Wisconsin residents to exercise extreme caution before responding to any solicitation offering investment or financial services, especially involving cryptocurrency. She warned that cryptocurrency transfers may be untraceable and irreversible, and consumers often only discover they have been scammed when they attempt to withdraw their invested funds.
The Message is Clear
Regulatory bodies play a part in protecting consumers from financial scams, as should they. The DFI, for instance, is committed to ensuring the integrity of Wisconsin’s financial system through the regulation of state-chartered financial institutions, enforcing finance laws, and protecting consumers, which, of course, are their responsibilities. However, above and beyond that, the DFI encourages individuals to educate themselves about the potential risks of investing in cryptocurrencies.
The FBI is warning Americans against using cryptocurrency money transmitting services that are not registered as Money Services Businesses (MSB) according to United States federal law and do not adhere to anti-money laundering requirements.https://t.co/CZF0PU2xgu pic.twitter.com/Ey4OjoiWfp
— FBI Columbia (@FBIColumbia) April 29, 2024
Coming on the heels of an April warning to Americans from the Federal Bureau of Investigation stating that the best investment practices will be to use registered, known CEX/DEX platforms that are compliant with both the statutory KYC and the Anti-Money Laundering laws, Secretary Olson-Collins cautions “To be safe, do not give money to anyone you meet online or allow them access to your bank account or digital wallet.”
Source: FBI
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