California Attorney General Issues Guidance For Residents Who Want To Invest In Digital Assets

As the broader digital asset roils amid news of the collapse of high-profile projects, California Attorney General Rob Bonta has released guiding principles for new investors.

The state Department of Justice (DoJ) has launched a website dedicated to all classes of digital assets to help residents invest funds in them. The site sheds light on the scams that are plundering the industry, such as digital asset romance scams, rug pulls, and pig butchers.

“Even if it’s not a scam, crypto assets can be risky, especially if you don’t have enough information to make informed judgments about how you’re spending your money,” said Rob Bonta.

The Attorney General warned that some shady digital asset projects could recruit celebrities to promote them in order to lure investment from unsuspecting members of the public. According to Bonta, the way around this is for potential investors to do careful research before investing in any digital asset project.

“Don’t fall for a fantasy — cryptocurrency, like all investments, carries significant risks, and there’s no guarantee you’ll see large — or any — returns,” he cautioned.

Bonta added that there is no government guarantee for funds invested in digital assets and investors should look before they jump to avoid being scammed. Other red flags highlighted on the website are the following:

  • Unsolicited calls or emails.
  • Investments that require high upfront payments.
  • The use of token names similar to popular virtual currency projects.

The alert urges investors to keep up to date with the latest events in the industry by following the regular updates issued by the Commodities and Futures Trading Commission (CFTC), the Securities and Exchange Commission and the Federal Trade Commission (FTC). follow recommendations.

California’s positive attitude towards digital assets

California has historically ranked highly in surveys of digital asset reception. A 2022 study by SmartAsset ranked California as the top state for “crypto readiness” given its governmental stance and the influx of digital asset companies.

In September, Gov. Gavin Newsom thwarted attempts for a bill to create an overarching framework for regulating digital assets in the state. Newsom refused to add his signature to the bill, saying he was “premature to legislate on a licensing structure” without considering the federal government’s efforts to regulate the sector.

This is the second time the state has attempted to enact tough legislation for the digital assets industry – the first dates back to 2015, but fell short in the face of staunch opposition from a state senator.

Watch: SEC Commissioner Hester Peirce on Bitcoin Association’s Blockchain Policy Matters

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