SALT LAKE CITY – Before you jump into the cryptocurrency craze, state regulators say be on the lookout for potential scams.
Cryptocurrency is booming. Bitcoins, one of the first types of digital currency, more than doubled in value in recent months.
“It’s up over 10,000 percent or something like that,” said Keith Woodwell, the director of the Utah Division of Securities.
Woodwell says cryptocurrency has really taken off, and people are making a lot of money. The digital coins allows people to bypass banks and traditional payment processes to pay for goods and services.
“It really is an ingenious technology. That’s not the problem,” Woodwell said.
Regulators are warning investors about scams related to cryptocurrencies.
“We have three or four cases right now that we’re investigating where people have invested in bitcoin or other cryptocurrencies, been promised high rates or return—that you’re going to be guaranteed 120 percent interest or something of that nature.”
Scammers are not only targeting the elderly to invest their retirement savings, but also millennials.
“A lot of it is done through Facebook, through other social media outlets,” Woodwell said. “‘Hey, your friends are getting in on this.’ People are posting messages about how much money they’re making.”
Jonathon Johnson is on the board of directors for Overstock. The Utah-based company accepts cryptocurrency. He says although there are legitimate ones, scammers will always show up to make a buck.
“Don’t get a second mortgage on your house to invest in cryptocurrency, that’s just bad investing,” he said.
Before you invest, Woodwell advises people to do their homework.
“I would argue that the easy money has already been made,” he said. “Really now if you’re buying in, you’re buying it at the picks and you’re taking it at a lot of risk.”