NASAA Warning Investors about Cryptocurrencies
An alert has recently been provided by the North American Securities Regulatory Association (NASAA) urging people to take serious account of the risks before investing in cryptocurrencies and not to pursue the trend blindly. The SEC appreciated this note and showed that more and more attention has been given to the regulation of cryptocurrencies by US regulators. As this emerging market continues to grow, its regulatory needs will become increasingly apparent. Perhaps we will see some regulatory measures actually deployed in 2018.
After This Notice Was Issued, The US Securities And Exchange Commission (SEC) Also Issued A Statement, Praising And Reiterating NASAA’s Warning.
The NASAA notice encourages investors not only to see their popularity when considering cryptocurrencies and their derivatives but to better understand the risks associated with them.
Joseph P. Borg, chairman of NASSA and director of the Alabama Securities Commission, stated in the notice, "Investors can't just see the popularity of cryptocurrencies, they must understand the investment risks associated with cryptocurrencies and financial products such as futures."
Borg also pointed out that the volatility of the cryptocurrency market will attract new investors to this kind of investment activity that they do not understand.
COPYRIGHT_WI: Published on https://washingtonindependent.com/nasaa-warns-investors-about-cryptocurrencies/ by Susan Murillo on 2021-01-29T13:38:34.225Z
"The recent fierce price fluctuations and speculative behavior of cryptocurrency-related investments can easily cause unsuspecting investors to flock to this investment field that they may not understand."
The NASAA Notice Covers A Series Of General Concerns About Cryptocurrencies And Warns People To Beware Of The Most Likely Fraud In Such Investments.
Both NASAA and the SEC have described the differences between cryptocurrency and "traditional currency" (fiat currency). Both organizations pointed out that it is these differences that make cryptocurrencies have high risks. The NASAA statement read:
"This kind of currency is different from traditional currencies in that it has no physical form and is generally not backed by tangible assets. They are not guaranteed or controlled by the central bank or other government agencies, cannot be exchanged with any commodity, and are almost unregulated."
The declaration ended with five possible signs of cryptocurrency investment fraud, including high-yield pledges, undocumented vendors, and rapid purchases. Most of the 2017 ICOs have these functions. The SEC’s support for the NASAA statement and its previous statements on cryptocurrencies and ICOs indicate that the United States is paying more and more attention to the regulation of the cryptocurrency sector.
As the cryptocurrency market continues to grow and attract more attention, the risks it brings to new investors will also cause more government agencies around the world to issue warnings and consider regulation.