As electronic media grows, scammers find new ways to obtain money from unsuspecting victims. Experts’ advice is that in case something sounds too good to be true, it probably is.
Investors have been warned by the federal Department of Financial Institutions in an official warning to take precautions against digital currency, marijuana investments and binary options.
The department said in their recent release that Marijuana investments could be particularly prone to scams. The controversial cannabis market is only partially legitimate because legal regulations vary between jurisdictions and states. The money lost can rarely be recuperated.
Some Binary options resemble online gambling rather than a trusted security investment. The investor needs to bet on whether stocks of a certain company will raise or drop in a certain period. With growing internet platforms for this market, many of them are either unregulated or totally illegal. Scammers are attracted to targeting uneducated investors with an investment opportunity that is easy to for them to understand.
Digital currency, for example, Bitcoin, is becoming accepted by a steadily growing list of brand-name retailers, the department says. The increased visibility and possibility for scams is another danger in terms of marketing with Bitcoin. What investors should be aware of is that digital currency values can fluctuate unpredictably and that there is very little uniformity amongst laws and regulations in different countries and jurisdictions, which gives scammers the opportunity to take advantage of and misinform their targets. Cyber-attacks are also a threat for digital currency, which is difficult to trace.
The department recommends that investors be extensively informed before investing money. The reason being that many dealers don’t bother to question the source of income being used to fund trading activities, all they are after are their own personal commission. For this reason, it was becoming a lot easier for some customers to launder money through illicit activities such as bank scams and drug sales, then invest it into binary options or other forms of stocks just to portray a legitimate business.
In countries like Mexico where drug money are used by many business men to invest in stocks and Binary options, the government is beginning to tighten its monitoring of activities of trans-border laundering of money into the country. In this line, the government wants stock brokers and Forex traders to disclose the identities of their partners and customers as well as their occupation to the government, this will help the government conduct a thorough research into the activities of these people and anyone found on wanted lists of the FBI will be immediately punished and his or her funds will be confiscated by the government.
Aside the customers of many stock trading brokers, the brokers themselves are being subjected to serious scrutiny by the government because no one can be trusted especially when it comes to money laundering and illicit drug businesses. Stock market brokerage operators have been mandated to supply the government with information on the flow of capital in and out of their businesses , this will allow the government check for irregularities.