SEC Warns Investors About Crypto Investments
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The US Securities and Exchange Commission (SEC) issued an investor alert on Thursday, urging caution around crypto-asset securities, saying firms offering crypto investments may not comply with US laws.
The SEC also said that unregistered offerings of crypto-asset securities may not provide investors with key information for informed decision-making, including audited financial statements.
The SEC further warned that “investments in crypto-asset securities can be exceptionally risky, and are often volatile, with a number of major platforms and crypto-assets becoming insolvent and/or losing value in the past year.”
Cryptocurrency mixing platform Tornado Cash has been hit by US sanctions over money laundering allegations. Cryptocurrency Illustration photo taken on January 24, 2022. (Reuters/Dado Ruvic/Illustration/Reuters)
Fraudsters continue to exploit the growing popularity of cryptoassets to lure retail investors into scams, often leading to devastating losses, the SEC said.
“It is never a good idea to make an investment decision just because someone famous says a product or service is a good investment. A celebrity endorsement does not mean that an investment is appropriate for all investors or that it is legitimate,” the SEC added .
The agency urged crypto investors to have an investment plan, as well as understand their risk tolerance and time horizon.
COINBASE SHARES EXTEND LOSS AFTER CRYPTO EXCHANGE EXPLAINS SEC PROBE
The SEC warning comes after the securities regulator sent Coinbase a “Wells Notice” that SEC staff had informed the cryptocurrency exchange that it had made a “preliminary decision” to recommend that the SEC file an enforcement action against the company for alleged violations of federal securities laws.
Brian Armstrong, CEO and co-founder of Coinbase, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022. (Reuters/David Swanson/Reuters Photos)
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| COIN | COINBASE GLOBAL INC. | 66.30 | -10.84 | -14.05% |
Global regulators are now keeping a watchful eye on the crypto sector after high-profile collapses wiped more than a trillion dollars from the digital asset industry’s market cap by 2022.
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