weather icon Clear

Nevada official urges caution about investments involving cryptocurrencies

With cryptocurrencies continuing to attract headlines, Nevada Secretary of State Barbara Cegavske is reminding Nevada investors to be cautious about investments involving cryptocurrencies.

“Investors should do their research to truly understand the risks associated with investments in cryptocurrencies, as well as cryptocurrency futures contracts and other financial products where these virtual currencies are linked in some way to the underlying investment,” Cegavske said in a statement Jan. 5.

Cryptocurrencies are a medium of exchange that are created and stored electronically in the blockchain, a distributed public database that keeps a permanent record of digital transactions.

Current common cryptocurrencies include Bitcoin, Ethereum and Litecoin, her office said in the statement.

“Unlike traditional currency, these alternatives have no physical form and typically are not backed by tangible assets,” the statement said. “They are not insured or controlled by a central bank or other governmental authority, cannot always be exchanged for other commodities, and are subject to little or no regulation.”

A survey of state and provincial securities regulators by the North American Securities Administrators Association, of which the Nevada Secretary of State is a member, shows 94 percent believe there is a “high risk of fraud” involving cryptocurrencies.

Regulators also were unanimous in their view that more regulation is needed for cryptocurrency to provide greater investor protection.

“The price fluctuations and current speculation in cryptocurrency-related investments may lure Nevadans to invest even though they may not fully understand the potential consequences,” Diana Foley, deputy secretary for securities, said.

“Cryptocurrencies and investments tied to them are often high-risk products with an unproven track record and high price volatility, making them unsuitable for certain investors saving for retirement,” Foley said.

The Nevada Secretary of State’s Office also said that:

■ Last month,the North American Securities Administrators Association identified Initial Coin Offerings (ICOs) and cryptocurrency-related investment products as emerging investor threats for 2018.

■ Unlike an Initial Public Offering (IPO) when a company sells stocks in order to raise capital, an ICO sells “tokens” in order to fund a project, usually related to the blockchain.

■ The token likely has no value at the time of purchase. “Some tokens constitute, or may be exchangeable for, a new cryptocurrency to be launched by the project, while others entitle investors to a discount, or early rights to a product or service proposed to be offered by the project.”

The North American Securities Administrators Association offers a short animated video, which can be found at https://vimeo.com/239995680, to help investors understand the risks associated with Initial Coin Offerings and cryptocurrencies.

Don't miss the big stories. Like us on Facebook.
Cortez Masto takes aim at egg prices, price gouging

Nevada’s average price for a carton of eggs has surged to $6.07 at the end of 2022, while the national average is $4.25, according to Catherine Cortez Masto’s letter.

ICYMI: See the animals at the Nature Health Farms ‘fun’draiser

Nature Health Farms was the venue for plenty of amusement this past Saturday, with a bevy of activities and entertainment taking place during the farm’s 3rd Annual “Fun”draiser.

ROAD CONDITIONS: Mountain pass from Pahrump to Vegas icy, but open

Patches of ice were still causing issues for some travelers on Highway 160 early Tuesday morning between Pahrump and Las Vegas, but conditions are expected to improve as temperatues warm into the mid-40s by Wednesday.

Student internships available at Nevada National Security Site

Nevada National Security Site is operating a 40-hour student program which offers paid internships from May through August each year. Here’s what you need to know.

What to know about this year’s Lincoln Day Dinner

This February, members of the Grand Ol’ Party will come together for an evening of conservative-likemindedness during the 2023 Lincoln Day Dinner in Pahrump.

Human-trafficking: ‘The problem is very real’

And it’s often committed by people the victim is already familiar with or those they have met and become friendly with online, say those who see the impacts of human trafficking.