Montpelier, VT — With the popular cryptocurrency Bitcoin again surging above $50,000 for a single coin, Department of Financial Regulation (DFR) Commissioner Michael Pieciak urges Vermont investors to fully understand the risks when using and investing in cryptocurrencies.
Throughout the pandemic, the number of cryptocurrency transactions initiated in Vermont skyrocketed over 400% percent (224,283 transactions in 2020, compared to 44,290 in 2019). The total value of those Vermont-based transactions topped out at $83.7 million in 2020, compared to $15.1 million in 2019.
With interest in cryptocurrency on the rise in Vermont, unfortunately, so are scams. Over the past month, DFR has received consumer complaints relating to cryptocurrency scams that total over $1 million in losses.
It is important for Vermonters to understand the various risks associated with cryptocurrencies before they decided to invest. Accordingly, today DFR published an Investor Alert for Vermont investors to use as a resource to become more familiar with cryptocurrencies and their risks.
“Innovations in financial services can bring important benefits to consumers, but Vermonters should approach these products with caution, particularly when considering substantial investments,” said Commissioner Michael Pieciak. “Cryptocurrencies are volatile and carry unusual risks because they exist largely outside the safeguards of the traditional financial system. Like any other volatile investment, avoid putting in money you cannot afford to lose.”
The DFR Investor Alert urges Vermonters to:
- Understand the risks of cryptocurrency investing, including its extreme volatility and risk of loss, and avoid investing money they cannot afford to lose;
- Learn about the uptick in cryptocurrency-related fraud and scams so they can spot and avoid these schemes;
- Avoid unlicensed cryptocurrency exchanges (find out if an exchange is licensed in Vermont); and
- Avoid unregistered cryptocurrency securities and cryptocurrency-related investments (find out if an investment is properly being offered).
If you feel like you have been scammed or have a complaint contact the DFR online or by calling 833-DFR-HOTLINE.