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SEC and 5 Other U.S. Regulators Issue Warning on Cryptocurrency Investments

The North American Securities Administrators Association (NASAA), a joint effort of the US Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Commodity Futures Trading Commission (CFTC), National Futures Association (NFA), Securities Investor Protection Corporation (SIPC), has issued multiple warnings regarding investments in cryptocurrency assets.

The notice warns that investments in cryptocurrency assets may be subject to abnormal fluctuations and speculation, and platforms for buying, selling, borrowing, or lending these investments may lack important protections. Regulators warn that those who offer cryptocurrency asset investments or services may not comply with applicable laws, including federal securities laws.

Investors who deposit funds or cryptocurrency assets into cryptocurrency entities may no longer have legal ownership of these assets and may not be able to retrieve them when they want to. In addition, the notice also details the many risks faced by cryptocurrency asset investors, including unregistered issuances, lack of Securities Investor Protection Corporation (SIPC) protection, and fraud.

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