SALEM, Ore. (KTVZ) – The Oregon Division of Financial Regulation is warning Oregon citizens to exercise caution when investing in cryptocurrencies, non-fungible tokens, or other new or volatile products.
Cryptocurrencies are digital assets that have no government backing. They are typically purchased, used, stored, and traded electronically through digital currency exchanges. They can be exchanged for goods and services, transferred from one person to another, or held for investment purposes.
A non-fungible token – or NFT – is a unique unit of data that is non-exchangeable and stored on a blockchain. They are often linked to digital artwork, photos and videos.
There are almost 10,000 active cryptocurrencies, and they and NFTs are growing in popularity. Regulation of these new types of assets is still evolving. While high returns are often promised, consumers often lose money investing in them.
In fact, earlier this month, the North American Securities Administrators Association (NASAA) released its annual list of the top threats facing investors, and investments tied to cryptocurrencies and digital assets topped the list.
“Scams promising big returns on cryptocurrencies and NFTs are flooding the internet,” said TK Keen, administrator of the Department of Financial Regulation. “Investors looking to buy cryptocurrencies and NFTs should do their homework to ensure they fully understand these investments and their risks before committing.”
The Department of Financial Regulation encourages Oregon residents to follow these tips before deciding to invest in cryptocurrency or NFTs:
- Research these types of investments carefully. Many of these “investment opportunities” are speculative in nature. Before making a transaction, make sure you understand what you are buying, the value of the item you are buying, the reason for the valuation and how easy it is to sell the investment if you want to get your money back.
- Use a digital currency exchange licensed by the state to transfer cryptocurrency to someone else. Oregon law requires companies that transfer digital currency from one person to another to be licensed as a money transmitter. Digital currency exchange companies that buy or sell cryptocurrency from their own holdings do not need to be licensed.
- Don’t spend money you need. The volatility of the digital currency and NFT markets means you shouldn’t buy cryptocurrency with money needed for essential purposes like food, housing, and gas.
Consumers who have questions about these unregulated assets can call the department’s attorneys at 866-814-9710 (toll-free).
The Department of Financial Regulation is part of the Department of Consumer and Business Services, Oregon’s largest corporate regulatory and consumer protection agency. Visit dfr.oregon.gov and dcbs.oregon.gov.