Many investment frauds involve unlicensed individuals or unregistered firms. Sometimes the language includes spelling, grammar, and typographical errors that can make the description confusing – another red flag the “investment” could be a scam. Investors should always be suspicious of hard to understand pitches that accompany promises of outsized returns. They can claim their technology is highly secret. Fraudsters often use complex new technologies to perpetrate investment schemes.

Complicated jargon and language that is difficult to understand.

Claims such as “risk-free”, “zero risk”, “absolutely safe”, and “guaranteed profit” are hallmarks of a fraud. Be wary of anyone who promises that you will receive a high rate of return on your investment, especially with little or no risk. All investments have risk, and investors should question any so-called “guaranteed” return. We urge investors to be on the lookout for any of these warning signs of investment fraud: The indictment further alleges that, despite the claims on the websites, the defendants told victims to deposit more bitcoins in order to receive the proceeds of their investments and never returned any funds to the victims. The indictment specifically alleges that the defendants are affiliated with three websites:, , and. The indictment alleges that the defendants engaged in a scheme to defraud whereby they solicited investments of bitcoin through certain websites that promised investors a 20-50 percent return on investments, “zero risk” and instant withdrawals. On April 24, 2019, the United States Attorney’s Office for the District of Oregon announced an indictment against two Nigerian citizens, Onwuemerie Ogor Gift (aka Onwuemerie Ogor) and Kelvin Usifoh, on one count of conspiracy to commit wire fraud, eleven counts of wire fraud, and one count of conspiracy to commit money laundering. This is an example of an advance fee fraud scam, where investors are asked to pay a bogus fee in advance of receiving proceeds, money, stock, or warrants.

Sometimes the fraudsters direct investors to pay additional costs (such as purported taxes) to withdraw fake “profits” earned from the investment.

These fraudsters can quickly send your money overseas, with little chance of you being able to get it back. The fraudsters promise high guaranteed returns (for example, 20-50%) with little or no risk.Īfter the investors make an investment, typically using a digital asset such as Bitcoin, the fraudsters in some cases stop communicating with the investors altogether. In some cases, the fraudsters claim to invest customers’ funds in proprietary crypto trading systems or in “mining” farms.

SEC and CFTC staff have recently observed investment scams where fraudsters tout digital asset or “cryptocurrency” advisory and trading businesses. These websites often contain “red flags” of fraud including claims of high guaranteed returns and promises that the investments carry little or even no risk. The SEC’s Office of Investor Education and Advocacy (OIEA) and the Commodity Futures Trading Commission’s Office of Customer Education and Outreach (CFTC) warn investors to scrutinize investment opportunities through websites purporting to operate advisory and trading businesses related to digital assets.

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