SEC issues investor alert over crypto investments


CoinDesk Consensus

The U.S. Securities and Exchange Commission (SEC) issued a notice on March 23rd highlighting several reasons why investors should be wary of investing in cryptocurrency securities.

“Investments in cryptocurrency securities can be highly volatile and speculative, and the platforms through which investors buy, sell, borrow, or lend these securities lack important protections for investors. There may be.”

SEC Said Companies offering crypto investment services may violate several applicable laws, including federal securities laws. The regulator added that the law requires anyone offering securities to register with the commission to enable proper regulation and oversight of the industry.

The bulletin noted that evidence of cryptocurrency exchange reserves is not standard audited financial statements. Investors should exercise caution when making decisions based on such statements, according to regulators.

The SEC further warned that cryptoassets can be highly risky and often volatile. said it was at significant risk, up to and including bankruptcy.

The regulator also noted that scammers are using the popularity of crypto assets to trick retail investors. Ponzi, pyramid schemes, and rug pulling were some of the ways these villains carried out their cheating.

The SEC wrote:

“It’s never a good idea to make an investment decision just because a celebrity says a product or service is a good investment.”

Meanwhile, the SEC has provided some investment tips to help ensure investment success.

The wording and timing of publication are frowned upon as regulators intensify scrutiny of the industry. On March 22, the SEC issued a well notice to US-based exchange Coinbase indicting crypto entrepreneur Justin Sun.

In addition to that, the bulletin said the White House Economic Advisory Committee Report a heavily criticized cryptocurrencysaying that most do not have a fundamental value.

“It continues to pose risks to financial markets, investors, investors and consumers,” the report added.

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