SEC issues warning to crypto investors

The US Securities and Exchange Commission has warned crypto asset holders to consider an investment plan.

The US Securities and Exchange Commission (SEC) has issued a warning urging investors to be cautious when considering crypto asset securities investments.

An investor alert, issued on Thursday, said those offering crypto asset investments or services “may not be complying with applicable law, including federal securities laws”, and the risk of loss “remains significant” when participating in crypto transactions.

The government agency urged people to consider the likelihood of fraudsters exploiting the rising popularity of crypto assets to lure holders into scams leading to “devastating losses”, with fake coin offerings, Ponzi and pyramid schemes, and “outright theft”.

The SEC further warned crypto investors to err on the side of caution when considering celebrity endorsements.

“It does not mean that an investment is appropriate for all investors, or even legitimate. Often, a celebrity is getting paid to promote investment opportunities, including those involving crypto assets.

“Even if a celebrity endorses an investment opportunity, you should consider the potential risks and opportunities to determine whether it is right for you”, read the statement.

Additionally, the agency encouraged crypto holders to follow an investment plan to “understand risk tolerance and time horizon”, which can be critical to monitoring the success of investments.

The SEC’s investor warning followed shortly after the company sent crypto exchange Coinbase a Wells notice threatening to sue the firm for alleged violations of federal securities laws.

Amid fraud and scam alerts, global regulators continue to keep a watchful eye on the crypto sector after the collapse of many high-profile firms amid the crypto winter.

Looking for your next crypto casino? Check out: Mega Dice or FortuneJack

Written by Isabella Aslam

Reporter

Isabella is an experienced writer in B2B and B2C journalism. Alongside crypto, Isabella writes and discusses the topics of relationships and psychology. Isabella holds a first-class degree in music journalism and often interviews electronic artists and DJs.

Similar News