Investors should exercise caution when investing in crypto-asset securities, the United States Securities and Exchange Commission’s Investor Education and Advocacy office said in a statement Thursday morning.
Investing in crypto-asset securities can be “exceptionally volatile and speculative,” the statement said, adding that the platforms where investors trade crypto may lack proper investor protections. The statement also says that the risk remains significant.
The…
Investors should exercise caution when investing in crypto-asset securities, the United States Securities and Exchange Commission’s Investor Education and Advocacy office said in a statement Thursday morning.
Investing in crypto-asset securities can be “exceptionally volatile and speculative,” the statement said, adding that the platforms where investors trade crypto may lack proper investor protections. The statement also says that the risk remains significant.
The news comes a day after Coinbase
COIN
received an SEC notice of potential securities charges on Wednesday, sending Coinbase shares down 16% Wednesday night.
Regulators have cracked down on the crypto industry in recent months, including shutting down crypto exchange Kraken’s betting program in February and charging it with $30 million.
Influencers and celebrities promoting crypto on social media have also recently been fined, including former NBA star Paul Pierce and Kim Kardashian. “It’s never a good idea to make an investment decision just because someone in the know says a product or service is a good investment,” the SEC statement said Thursday.
In January, the SEC also hit Genesis Trading and Gemini, two crypto exchanges for trading Bitcoin BTCUSD, +3.99% , Ethereum ETHE, +6.49% and other cryptocurrencies, with charges related to unregistered securities.
“Over the past year, a number of cryptoasset entities have faced serious financial difficulties, sometimes resulting in suspending their customers’ ability to withdraw their assets,” the statement said. “Some cryptoasset entities have gone bankrupt, and it is unclear how much of their holdings (if any) clients can recover. Investors must be wary of claims that “you always retain ownership of your cryptoassets” and “you can take out your belongings whenever you want.”
