The California Department of Financial Protection and Innovation (DFPI) announced last month that it had issued cease-and-desist orders against 11 entities for violating California securities laws. Some of the highlights included allegations that they were offering ineligible securities and material errors and omissions to investors.

These hacks should remind us that while cryptocurrency is a unique and exciting industry for the general public, it is still an area full of potential opportunities for unscrupulous players and scammers. So far, government regulation of cryptocurrencies has been minimal at best, with a distinct lack of action. Whether you are a full-time professional investor or just a casual fan looking to get involved, you should be absolutely sure of what you are getting into before engaging in a cryptocurrency opportunity.

California is building a crypto business registration process for those looking to do business in the state. Governor Gavin Newsom objected to the proposed structure because the resources to create and enforce such a structure would be prohibitive for the state. While this type of compliance infrastructure has yet to be adopted, it does point to regulators’ concerns about the crypto industry.

There appears to be a pattern that makes emerging industries, especially those that receive the same amount of international attention as cryptocurrencies, especially vulnerable to fraud. One need only go back to legalizing cannabis to find the last time California had to deal with a scam of this magnitude.

About it: The Feds go into the metaverse – from Axie Infinity to Bored Monkeys

It seems inevitable that California, known as a leader in regulation and compliance, will build some form of crypto compliance infrastructure in the name of consumer protection. Historically, once California abandoned this framework, other states would follow suit.

Federal and state officials have attempted to develop bills that set financial standards for cryptocurrencies, but so far, without much success. At the federal level, Senators Cory Booker, John Thune, Debbie Stabeno, and John Bozeman sponsored a bill authorizing the Commodity Futures Trading Commission (CFTC) to act as a cryptocurrency regulator, while Senators Kirsten Gillibrand and Cynthia Loomis co-sponsored the bill. Bill provides clearer guidance on digital assets and virtual currencies. Lawmakers have even turned to tech figures like Mark Zuckerberg to assess the cryptocurrency scam.

Cryptocurrency, California, CFTC, Legislation, Law, Scam, Scam, Bitcoin Scam
Source: String Analysis
None of these crypto-focused notes or others are expected to pass in 2022, but this level of bipartisan cooperation has not been seen recently. Cooperation should only reflect the degree of need for a regulatory framework. In other words, Democrats and Republicans should talk to each other about anything to stop the press, but the fact that they are sponsors of so many bills should tell us that there is an urgent need for leadership.

How should one approach investing in the crypto space if the authorities are not going to establish control over the cryptocurrency? There are some general points to keep in mind if you have the opportunity to invest in cryptocurrencies.

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When considering an opportunity, practice your due diligence! Do not take anyone’s words without financial support. If coding is not an area of ​​expertise, contact professionals with qualified experience. Be sure to use crypto monitoring and blockchain analysis tools, if possible, as part of the verification process.

A common strategy for scammers is to apply undue pressure or set artificial deadlines for potential shutdowns. Slow down the process and take all the time it takes to make an investment decision.

If this sounds too good to be true, it probably is. Although these cliches are exaggerated, they make the right point. There have been cases where schemes have offered to pay initial and continuing dividends to any new investors brought in, as well as additional dividends payable from investors brought in by new investors.

Source: CoinTelegraph