Whether you embrace it or loathe the idea, cryptocurrencies are here to stay. As with every investment, the benefits are balanced out by associated risks. Suzanne DeWitt helps clients navigate these complex financial waters.
While there are many arguments in cryptocurrency’s favor, the fact that it’s still unregulated is reason enough to tread carefully. “The risk is very real,” says Suzanne DeWitt, Managing Partner at DeWitt PLLC. “At a minimum, one must be aware of the four fundamental risks.” First, cryptocurrency exchanges are vulnerable to cyberattacks. “Competition remains fierce among thousands of blockchain projects, so there’s no guarantee that a crypto project you invest in will succeed.” Also, regulators may also crack down on the entire crypto industry, especially if governments continue to view cryptocurrencies as a threat rather than just an innovative technology. “Then there’s the fact of cryptocurrencies being based on cutting-edge technology, and that also increases the risks for investors,” she says. “Much of the tech is still being developed and is not yet extensively proven in real-world scenarios.” This doesn’t mean you shouldn’t invest, just do so with the advice of a lawyer who’s versed in the DeFi (Decentralized Finance) space; DeWittPLLC.com.