This week the website of the Securities and Exchange Commission (SEC) posted an article warning cryptocurrency investors about investing in cryptocurrency assets. The other day the head of the education and advocacy department of the SEC, Lori Schock, wrote an unofficial post addressed to average investors. The message begins with a situation that occurred in one of the homes for the elderly, where Laurie gave a lecture on investing. An elderly woman approached her and asked: “My children keep telling me I need to hurry up and invest in Bitcoin is it safe, have I already missed the boat?”
Even though not only elderly people, but also various businessmen wishing to invest millions into any cryptocurrency project, are interested in investment issues, Lori Schock says that she can not give instructions on investing into Bitcoin, or any other cryptocurrencies and projects, but only provides some advice on some issues that should be considered when deciding whether an investment is suitable for you or not.
Lori emphasizes that any investment into projects related to cryptocurrency is not subject to the SEC protection laws, and reinforces her warning by the statement of the SEC chairman Jay Clayton:
“You should understand if you lose money there is a real chance the SEC and other regulators won’t be able to help you recover your investment, even in cases of fraud”.
After that, Lori Shock also stated that investors do not conduct proper research before investing, and in most cases they trust advertising and hype around the project which they want to invest into. In particular, now it has become popular to show famous actors investing into cryptocurrency, because most of their fans believe such advertising unconditionally. An example is the recent PR-campaign of an ICO, which hired actor Steven Seagal to promote their project.
To sum up Lori Schock says:
“Cryptocurrencies may be today’s shiny, new opportunity. Proceed with caution, do your research, evaluate your financial goals and most importantly, do not flip a coin when you’re making investment decisions”.