Benzinga - U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler issued a stark warning to investors, urging caution when considering crypto assets as the first-ever spot Bitcoin (CRYPTO: BTC) ETF decision looms.
His statement comes amidst growing anticipation and speculation surrounding the potential impact of these ETFs on the market.
"If you're considering an investment involving crypto assets, be cautious. Crypto asset securities may be marketed as new opportunities but there are serious risks involved," he said.
Risky Business: Unregulated Markets And Celebrity Hype
Lori Schock, director of the SEC’s Office of Investor Education and Advocacy, highlighted the significant risks associated with cryptocurrency-related investments, emphasizing the lack of regulatory oversight compared to traditional securities markets.
She pointed to potential pitfalls like unknown counterparties, opaque asset allocations and the absence of investor protections against fraud.
Furthermore, Schock warned against succumbing to celebrity endorsements and the allure of trendy investments fuelled by social media hype.
"Never make an investment decision based solely on celebrity endorsements," Schock urged, emphasizing the importance of thorough independent research before committing any funds.
Scam City: Fraudsters Lurk In The Shadows
Schock specifically cautioned investors about the heightened risk of fraud prevalent in these emerging markets. Scammers, she noted, exploit the novelty of crypto assets and capitalize on the fear of missing out to lure unsuspecting individuals into fraudulent schemes.
Schock advised investors to be wary of red flags like high-pressure sales tactics, guaranteed returns, and "too good to be true" claims.
She encouraged them to visit Investor.gov to educate themselves on common investment scams and verify the registration of any financial professionals they engage with.
Also Read: Crypto VC In Chilling Grips Of Winter: Galaxy Research Reveals A Lack Of Dealflow
Buyer Beware: Invest Responsibly And Diversify
While acknowledging the potential of digital currencies, Schock stressed the importance of approaching them with caution and a realistic understanding of the risks involved.
She advocated for diversifying investments to mitigate potential losses and prioritizing long-term financial goals over temporary trends.
"Cryptocurrencies may be today's shiny, new opportunity," Schock stated, "but there are serious risks involved."
She underscored the importance of thorough research, careful evaluation of personal financial goals and responsible investment practices before venturing into the crypto sphere.
The crypto community was quick to slam Gensler over his remarks and said the SEC and its chairmen pro-actively posting warnings about crypto just before the deadline date indirectly confirms that ETF will be approved soon.
Crypto influencer Dan Held shared a chart of the Bitcoin up move trajectory and quipped, "Oh nooo it’s so risky!!"
Read Next: Bitcoin ETF Battle Heats Up: 'US Government Plans To Seize All BTC ETFs,' Warns Max Keiser
Photo: Bitcoin, Shutterstock; Gary Gensler, Third Way Think Tank, Flickr Creative Commons
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