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SEC Warns Investors: Be Vigilant Regarding Crypto Asset Securities

SEC | Release | March 23, 2024

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The SEC’s Office of Investor Education and Advocacy continues to urge investors to be cautious if considering an investment involving crypto asset securities.

  • Risk notice to investors: 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 risk of loss for individual investors who participate in transactions involving crypto assets, including crypto asset securities, remains significant.  The only money you should put at risk with any speculative investment is money you can afford to lose entirely.
  • Those offering crypto asset investments or services may not be complying with applicable law, including federal securities laws.  Under the federal securities laws, a company may not offer or sell securities unless the offering is registered with the SEC or an exemption to registration is available.  Similarly, the law requires parties such as securities broker-dealers, investment advisers, alternative trading systems (ATS), and exchanges to register with the SEC, a state regulator, and/or a self-regulatory organization (SRO), such as FINRA.  Moreover, entities and platforms involved in lending or staking crypto assets may be subject to the federal securities laws

See:  Should the SEC Be Allowed to Wage an Unsupervised Dirty War on Crypto?

  • Investments in crypto asset securities can be exceptionally risky, and are often volatile.
  • Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams, often leading to devastating losses.
  • Having an investing plan, as well as understanding your risk tolerance and time horizon, can be critical to your investing success.

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NCFA Jan 2018 resize - SEC Warns Investors:  Be Vigilant Regarding Crypto Asset SecuritiesThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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