An investor education official with the Securities and Exchange Commission (SEC) had a simple message to would-be cryptocurrency investors this week: think before you leap.
In a blog post published Wednesday, Lori Schock, director of the SEC’s Office of Investor Education and Advocacy, noted that cryptocurrencies and related investments are still relatively new, arguing that some investors “may not know exactly who [they] are dealing with, where [their] money is going or what [they] are getting in return.”
Indeed, much of the post highlighted the risks associated with investing in cryptocurrency-related markets, advising readers to “always do thorough, independent, research of the product.”
The blog post echoed past alerts published by the SEC as well as the Commodity Futures Trading Commission (CFTC). Last week, the CFTC issued a warning on “pump-and-dump” groups operating in the cryptocurrency market.
Other warnings have cautioned investors against trusting retirement schemes which claim government agency backing or publicly-traded companies that promote their pivots to business lines related to cryptocurrency or blockchain tech.
In the end, Shock wrote that “cryptocurrencies may be today’s shiny, new opportunity but there are serious risks involved” – and as a result, investors should tread lightly before putting their money into the market.
“Proceed with caution, do your research, evaluate your financial goals and most importantly, don’t flip a coin when you’re making investment decisions,” she concluded.
Bitcoin image via Shutterstock