Malta’s Financial Watchdog Educates Public on Crypto Scams

Europe Malta

Malta Financial Services Authority (MFSA) has published a guidance document warning the public of the risks associated with investing in cryptoassets.

Titled “Guidance Note To The Public Regarding Cryptocurrency Scams” the document provides the public with instruments to help recognize potential scams, best practices for staying safe when investing in cryptoassets, and actions to take if they fall victim to a scam.

The regulator lists the most comment types of scams, such as fake ICOs, crowdfunding ventures promising higher gains which are availed of once the coin becomes active, and fake exchange platforms and e-wallet apps. The document then introduces a check-list of the 11 most common “warning signs” of fraudulent crypto investments:

  1. Unrealistically high rates of return which are usually higher than the market average;
  2. Easy withdrawals which may be made at ‘anytime’;
  3. Promises that any funds deposited are 100% guaranteed;
  4. The business being unregulated;
  5. Lack of documentation or the use of documentation which is copied from a legitimate business;
  6. Aggressive selling techniques which put pressure and rush you to secure a sale;
  7. The absence of physical local offices;
  8. Contradictions between documents and spoken information;
  9. Not answering and avoiding hard questions;
  10. Lack of information being provided on the website, or within the whitepaper;
  11. The use of buzz words such as ‘no risks’, ‘gains guaranteed’, ‘become a billionaire’, ‘free services just register’.

“Always remember – if it seems too good to be true, it probably is!” concludes the paper.

Recently the first 14 cryptoassets agents have been licensed by the MFSA to operate in Malta.

About the author

Maciek Klimowicz

Maciek Klimowicz

A seasoned writer and editor with 10 years of experience in a variety of print and online media. Recognizing the transformative potential of the blockchain technology, Maciek has now put his pen to work to explore the key issues of this fast-evolving sector. Contact him on [email protected].

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