US Securities and Exchange Commission with slightly desperate warning on Cryptocurrencies

Yeah, I guess we all know by now. Cryptocurrencies are not “normal” currencies in the traditional sense, they are not state-guaranteed, they are not issued or regulated by central banks, and so on and so on. Numerous authorities in Europe have already warned that these are not currencies or safe custody, but pure speculative objects. Now quite recently, a warning note from the US Securities and Exchange Commission “SEC” has been put on the table.

Cryptocurrencies, initial coin offers and everything related to them are offered by the providers as investment opportunities rather than as an efficient exchange method (as is the case with currencies). In addition, according to the SEC, many providers in this sector would not comply with state supervisory rules. It is the job of the SEC to protect private customers and to recover funds in the event of fraud. The SEC is also taking action in the area of cryptocurrency fraud. The only thing they wanted to do was to make it clear with this note that it would be difficult for the SEC to retrieve lost funds for customers in this market segment. Here the original text of the report:

We commend the North American Securities Administrators Association (NASAA) on their release highlighting important issues and concerns related to cryptocurrencies, initial coin offerings (ICOs) and other cryptocurrency-related investment products.

NASAA’s release is a timely and thoughtful reminder to Main Street investors to exercise caution. The release recognizes that cryptocurrencies, while touted as replacements for traditional currencies, lack many important characteristics of traditional currencies, including sovereign backing and responsibility, and now are being promoted more as investment opportunities than efficient mediums for exchange.

The NASAA release also reminds investors that when they are offered and sold securities they are entitled to the benefits of state and federal securities laws, and that sellers and other market participants must follow these laws. Unfortunately, it is clear that many promoters of ICOs and others participating in the cryptocurrency-related investment markets are not following these laws. The SEC and state securities regulators are pursuing violations, but we again caution you that, if you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment.

We encourage investors to read NASAA’s release and particularly to keep in mind the common red flags of investment fraud that the release reiterates. We also encourage investors to review the SEC investor bulletins, alerts, reports, and statements linked below.

Here is also a more detailed warning from the North American Association of Supervisors (NASAA).

The SEC Logo.

Please follow and like us:

Be the first to comment

Leave a Reply

Your email address will not be published.