Cautionary investor advice from the SEC on securities in cryptoassets

The United States Securities and Exchange Commission (SEC) has issued a warning about investing in crypto. The agency cites volatility and lack of safeguards for investor protection of crypto assets.

The United States Securities and Exchange Commission (SEC) issued a notice on March 23 warning investors about securities in cryptoassets. The SEC’s Office of Investor Education and Advocacy stated that crypto investments can be “exceptionally volatile and speculative, and the platforms where investors buy, sell, borrow or lend these securities may lack important investor protections.”

That last point was at the heart of the notice, echoing sentiments that agency officials have expressed in the past. Some in the crypto community have even said that SEC Chairman Gary Gensler and others have launched a hostile mission against crypto exchanges and companies.

The SEC and its executives counter such remarks by saying it is only trying to protect investors. While many crypto companies have acknowledged that the crypto market needs more rules, it disagrees with the SEC’s approach to regulation in enforcement.

Coinbase was the latest crypto company to add this to the discussion after it revealed that the SEC had sent it a Wells notice. The popular exchange has tried to cooperate with the SEC on regulations.

Lack of clarity about regulation from the SEC a major obstacle

In the notice, the SEC states that no crypto exchange has regulated itself in the market. Registrants include broker-dealers, investment advisors, alternative trading systems (ATS) and, of course, exchanges. The SEC also takes note of the lending and betting of crypto-assets.

However, crypto companies have urged the SEC to provide more regulatory clarity so they can better operate within the law. This has been a major pain point for the industry, which continues to do everything it can to win agencies.

El Salvador removes tech tax as others look to tax crypto

Meanwhile, a few other countries are going all out to regulate the crypto market. Some even go as far as eliminating taxes, as in the case of El Salvador. The latter is arguably the country most gung-ho about cryptocurrencies, having made bitcoin legal tender.

This is in sharp contrast to countries such as the USA and India. The former currently levies a 30% tax on crypto mining usage, while India has imposed heavy tax on crypto trading.

As it stands, most countries are working on CBDCs, or at least researching them. Private cryptocurrencies are something most governments seem to oppose.