The SEC, in collaboration with regulatory bodies, issues a warning on the Crypto Asset risks during World Investor Week. Investors urged to exercise caution and perform due diligence.
The SEC’s Office of Investor Education and Advocacy (OIEA) has released an Investor Bulletin as part of World Investor Week, emphasizing the risks associated with crypto asset investments. This global campaign, endorsed by IOSCO, aims to educate and safeguard investors. The bulletin, developed in collaboration with FINRA, CFTC, NFA, SIPC, and NASAA, focuses on the three themes of World Investor Week 2023: Crypto Assets, Investor Resilience, and Sustainable Finance.
Regarding crypto assets, the bulletin underscores their exceptional volatility and speculative nature, cautioning that associated platforms may lack vital protections. It also warns of potential non-compliance with securities laws by those offering crypto asset investments or services. Investors are alerted to the risk of losing legal ownership of assets deposited with crypto asset entities.
The bulletin further highlights risks such as unregistered offerings, absence of SIPC protection, and fraud within the crypto asset space. Investors are advised to actively research their portfolios for crypto asset-related investments and be vigilant against scams. The regulators stress that speculative investments should only involve funds that can be affordably lost entirely.