SEChas issued a new warning as it continues its intense pressure on cryptocurrency exchanges. The warning included advising investors to be careful before investing in “crypto-asset securities.” Stating that these investments can be “highly volatile and speculative”, the institution drew attention to the view that they may lack important protections for investors.
As Koinfinans.com reported, the SEC had recently begun to put pressure on Tron founder Justin Sun and leading exchange Coinbase.
The latest warning came from the SEC’s Office of Investor Education and Advocacy, despite the widespread view among the crypto community that there is no clarity on regulation.
While the SEC argues that the provisions in securities laws apply to cryptoassets as well, experts believe this is wrong. The SEC believes individual investors are more likely to experience losses, as seen in the FTX and Terra crashes.
SEC, crypto- warned that organizations providing investments or services may not comply with applicable laws, including federal securities laws. However, this raises questions from crypto participants about the lack of regulatory clarity. The agency also warned investors about the concept of ‘Proof of Reserve’. He added that the disclosure may only provide part of the story, adding that proof of reserve “doesn’t tell customers the whole story about the business’s liabilities.”
The SEC also touched upon the details of the fraud factor in its warning.
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