The US Securities and Exchange Commission (SEC) has issued an official investor alert warning against investing in crypto assets that may not comply with US laws. This follows several lawsuits the regulator has brought forward against notable figures, such as Justin Sun of Tron, and various celebrity endorsers. The alert also highlights the speculative and volatile nature of the crypto market, in addition to recent action taken against the industry. SEC has also urged investors to exercise caution and carefully assess their entry into this market.
SEC issues an official warning to crypto investors
The US Securities and Exchange Commission (SEC) investor alert cautioned potential investors of the risks associated with investing in crypto assets. The official statement released by the agency noted that investments in crypto asset securities could be extremely volatile and speculative. Furthermore, it cautioned that platforms used to buy, sell, borrow, or lend these securities might not offer the necessary protections needed to safeguard investors. The alert follows a series of enforcement actions against various space companies.
The SEC alert stressed the “risk of loss” for individual investors, noting that anyone looking to speculate with crypto investments should only put money at risk that they can afford to lose entirely. It also warned that some companies offering such investments might not follow federal securities law, potentially opening up retail investors to fraudsters and devastating losses. This warning comes at a critical time as the SEC is nearing the end of its two-year legal dispute with Ripple, showing that it is taking decisive action against entities involved in the digital asset space.