MADISON — The
Wisconsin Department of Financial Institutions on Monday
issued an advisory to investors to be wary of investing
in three new products that have been in the news:
marijuana-related investments, binary options and
“At first glance,
these products appear to have no real connection to one
another. But what they all have in common is their
recent emergence as three investments that both sellers
and buyers hope will become the ‘next big thing,’ ” said
Patricia Struck, administrator of DFI’s Division of
Securities, in a statement. “Before you consider
investing, make sure you understand what these products
are, their benefits and their risks.”
As more areas
legalize the sale of marijuana, there are more companies
seeking funds from investors, according to the
announcement. Struck said these requests can be
particularly susceptible to scams. A binary option
contract is based on the investor’s prediction of an
underlying security’s value at a predetermined date.
According to the advisory Monday, there are only two
possible outcomes: the investor may receive a fixed
amount of money for guessing correctly, or lose the
entire investment for guessing incorrectly.
In regards to
digital currency, Bitcoin is one of the more well known.
The trouble with digital currency is that there is no
uniformity on how these forms of currency are regulated
so scammers can take advantage of the confusion.