The Securities and Exchange Commission (SEC) has issued a warning to investors to be wary of the risks of investing in cryptocurrency. The warning comes more than a year after the cryptocurrency market erased $2 trillion in market value.
The SEC highlighted that investments in crypto asset securities can be 'exceptionally volatile and speculative'. It also warned that 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 SEC also pointed out that not only are crypto tokens extremely speculative and risky, but many of the platforms that investors use to buy cryptocurrencies could be at risk of not complying with applicable law, including federal securities law.
Finally, the SEC warned that fraud remains rampant in the crypto industry and that investors should only put money at risk with any speculative investment that they can afford to lose entirely.
In conclusion, the SEC has warned investors to be wary of the risks associated with investing in cryptocurrency, and to ensure that they only put money at risk that they can afford to lose entirely. The warning comes after a year of significant losses in the cryptocurrency market and a government crackdown on the crypto industry.