The US Securities and Exchange Commission (SEC) on March 23 issued a notice highlighting several reasons investors should be wary of investing in crypto assets securities.
“Investments in crypto asset securities can be exceptionally volatile and speculative, and the platforms where investors buy, sell, borrow, or lend these securities may lack important protections for investors.”
The SEC said firms offering crypto investments services might violate several applicable laws, including the federal securities laws. The regulator added that the law requires anyone offering securities to register with the Commission to enable proper regulation and oversight of the industry.
The bulletin mentioned that crypto exchanges’ proof of reserves is not a standard audited financial statement. According to the regulator, investors should exercise extreme caution when relying on such statements to make decisions.
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