The SEC’s Office of Investor Education and Advocacy has issued a stern warning to investors considering investments involving what it defines as cryptoasset securities.
The Office continues to urge caution, highlighting the extraordinary volatility and speculative nature of such investments.
The SEC reminded investors that the platforms through which they buy, sell, borrow or lend these securities may lack important protections. According to the agency, the risk of loss remains significant for individual investors participating in transactions involving crypto assets, including crypto asset securities.
According to the statement, those offering crypto asset investments or services may not comply with applicable laws, including federal securities laws. Under these laws, a company cannot offer or sell securities unless the securities offering is registered with the SEC or an exemption from registration is available.
SEC has recently cryptocurrency He also touched upon the concept of Proof of Reserves, which is frequently used by the market to prove its reserves:
“Crypto-asset entities, including trading platforms and issuers of crypto-asset securities, use Proof of Reserves to describe a voluntary method for providing evidence that an entity has sufficient reserve assets to cover those held for customers and accounts at a particular time.” uses the term. However, such services may not provide meaningful assurance that these organizations have sufficient assets to support their clients’ balances.”
SEC officials claimed that cryptocurrency investments are extremely risky:
“Investments in crypto asset securities can be extremely risky and often exhibit volatility. Over the past year, the crypto asset space has been extremely unstable, with a number of major platforms and crypto assets going bankrupt and/or losing value. “Scammers continue to take advantage of the growing popularity of crypto assets to lure retail investors into scams, often leading to devastating losses.”
*This is not investment advice.
For exclusive news, analysis and on-chain data Telegram our group, twitter our account and YouTube Follow our channel now! Moreover Android And iOS Start live price monitoring now by downloading our applications!