The SEC warns investors to be wary of crypto securities.

News Desk4
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The warning comes one day after Coinbase disclosed the receipt of a Wells Notice from the U.S. securities regulator.

The U.S. Securities and Exchange Commission (SEC) has urged investors to exercise caution when investing in crypto asset securities.

The agency’s Office of Investors Education and Advocacy warned the platforms offering crypto trading may not be complying with federal securities statutes.

“The law requires parties such as securities broker-dealers, investment advisers and exchanges to register with the SEC, a state regulator, and/or a self-regulatory organization,” the SEC said in a bulletin on Thursday. “Moreover, entities and platforms involved in lending or staking crypto assets may be subject to the federal securities laws.

The SEC has previously attempted to demonstrate that many crypto exchanges are operating as unregistered securities exchanges in the U.S. SEC Chair Gary Gensler has frequently voiced this view.

The regulator’s warning comes the day after Coinbase (COIN) disclosed the SEC issued it a Wells Notice indicating a possible imminent enforcement action tied to the exchange listing of potentially unregistered securities. Coinbase’s Nasdaq-listed shares were hit hard by this news, slumping as much as 20% in early trading on Thursday. At the time of writing, they are have recovered around half of their losses, down 10% at $69.32.

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