Gary Gensler, the 33rd chairman of the US Securities and Exchange Commission (SEC), warns crypto investors.
In a three-piece wire on the social media platform X, Gensler gives Americans his thoughts on the crypto space.
In his statement, Gensler makes three points, telling investors that crypto institutions may not be compliant with U.S. law and that investing in digital assets is inherently risky.
“Those offering investments/services in crypto assets may not comply with applicable laws, including federal securities laws. Investors in crypto assets should understand that they may be denied important information and other important protections related to their investment.
Investments in crypto assets can also be exceptionally risky and are often volatile. A number of major platforms and crypto assets have become insolvent and/or have lost their value. Investments in crypto assets remain subject to significant risks.”
The SEC chairman also points out that the crypto space is full of scams and bad actors.
“Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams. These investments remain rife with fraudulent coin offers, Ponzi and pyramid schemes, and outright theft where a project promoter disappears with investor money.”
According to cybersecurity firm Scam Sniffer, crypto-phishing frauds alone have facilitated the theft of more than $295 million in assets by 2023.
In the July to September 2023 quarter, “total losses from hacks, phishing fraud and rug pulling in Web3 amounted to $889.26 million,” with hacks or major attacks making up around 60% of losses, according to Beosin EagleEye .
Gensler’s warning comes as crypto investors anticipate the approval of a Bitcoin Exchange Traded Fund (ETF), which could reportedly happen this week, according to Fox Business.
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