Beware Of Cryptocurrency IRA Scams Advertising IRS Approval
Tax season always ushers in a new crop of scams.
This year a cryptocurrency IRA scam is making headlines.
These virtual currencies are the new ‘sexy’ for investors with their values appearing to climb to the stratosphere. The scammers are finding ways to lure less than savvy investors to put their real money in cryptocurrencies, the latest being an IRS approved IRA scam.
In fact, just a few days ago the U.S. Commodity Futures Trading Commission (CFTC) published a customer advisory warning investors to “be wary of all virtual currency retirement accounts claiming to be IRS-approved or IRA approved.”
Because taxpayers typically focus on retirement savings at tax time to increase deductions or maximize savings, the criminals play to this with false claims. Some are making virtual currencies seem less risky in retirement savings. However, the advisory also added that, “the crypto market had been particularly volatile of late, and investors will not be protected from these wild price fluctuations simply because the cryptocurrencies are held in an IRA. It outlined a variety of risks associated with digital currencies, such as the unregulated nature of the market, the risk of hacks, and the difficulty of retrieving lost or stolen digital assets.”
Just because your money is in a retirement account does not mean the IRS approves of a particular account.
This is clear from what the CFTC had to say on the matter. Neither the CFTC nor the IRS “approve or review investments for IRAs”, nor do they endorse any type of investment, offer advice on investments, or issue statements which suggest that any investments in an IRA are approved, regulated, or protected by them. Therefore, any advertisements pitching investments that are IRS or IRA approved need to be viewed with extreme caution.”
The basic message is this: No matter how desperately you are longing to cash in on the cryptocurrency craze, don’t fall for the scam that a particular method is IRS or IRA approved. Keep your money. You earned it. Don’t play into the crafty hand of criminals.