SEC Chair's Crypto Warning Amidst Bitcoin ETF Anticipation and Rising Scams: North Korean Hackers Steal $600M
Summary:
SEC Chair, Gary Gensler, issues a warning about cryptocurrency risks amidst rising FOMO among investors and the potential approval of a Bitcoin ETF. He highlights various scams such as fraud coin offerings and pyramid schemes. Meanwhile, North Korean hackers have reportedly stolen around $600 million worth of digital assets in 2023 and speculation around Bitcoin ETF's approval prompts traders to wager $1.5 million.
Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), recently went to social media to forewarn investors about the risks associated with cryptocurrency investments. This cautionary message was re-emphasized by the securities regulator in response to the escalating fear of missing out (FOMO) among investors, especially with the expected approval of a Bitcoin Exchange-Traded Fund (ETF) just around the corner. In 2023, North Korean hackers reportedly pilfered $600 million in cryptocurrency, and speculation over the possible approval of a Bitcoin ETF led traders to wager $1.5 million.
In a recent post shared on a popular social media platform, Gensler emphasized the potentially high risk and volatility associated with cryptocurrency. Although Gensler did not explicitly mention Bitcoin ETF in his social media advisory, the timing of his warning suggests that investor safety is at the forefront of the SEC's agenda, especially as approval for a Bitcoin ETF is reportedly imminent.
The rising popularity and allure of cryptocurrency has unfortunately been exploited by scammers to trick unsuspecting retail investors. Issues such as fraudulent coin offers, Ponzi and pyramid schemes, and outright theft where promoters of a project disappear with investors' money, have been highlighted by Gensler. Despite several amendments by applicants, the SEC has yet to approve a Bitcoin ETF.
Just ahead of the potential approval of a Bitcoin ETF, the SEC reiterated the hazards of FOMO among individual investors. It reminded retail investors via a news post on a well-known social media platform about the inherent risks of digital assets like cryptocurrencies, meme stocks, and non-fungible tokens (NFTs). This warning message first appeared in early 2021 and has been reiterated at times of market fluctuations.
Speculations are rife among social media users regarding the approval of one or more Bitcoin ETFs by the SEC, which is expected to make a decision before a deadline on January 10.
In 2023, North Korean associated hacker groups managed to steal $600 million in digital assets, as per the findings of blockchain intelligence firm TRM Labs. It's suspected that the actual amount stole could reach up to $700 million. This brings the total amount stolen by North Korean hackers to approximately $3 billion since 2017.
These hackers typically pry on vulnerable targets – users' private keys or seed phrases, eventually transferring the looted funds to wallets controlled by North Korea. Eventually, these funds are swapped for Tether (USDT) or Tron (TRX).
TRM Labs underlined the need for both businesses and governments to remain vigilant and innovative to counteract North Korea's hacking proficiency.
This write-up should be regarded as a news brief rather than an investment counsel or endorsement. As every investment and trading move carries risk, readers are recommended to perform their own research before making any financial decision.
Published At
1/9/2024 12:09:48 AM
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