America’s chief financial regulator is warning investors against cryptocurrency scams. SEC chairman Jay Clayton released an official statement today urging caution on cryptocurrency and initial coin offerings. “If an opportunity sounds too good to be true,” the statement reads, “or if you are pressured to act quickly, please exercise extreme caution.” Clayton also cautioned that no ICO has been registered with the SEC and that any trading of cryptocurrencies should be done with a considerable amount of care.
Clayton’s comments come as bitcoin is rapidly gaining value, attracting attention from more traders hoping to cash in. On November 29th, bitcoin passed $10,000 in value, a more than 933 percent surge from the beginning of the year. By December, bitcoin had soared past $15,000 and is worth around $17,000 as of press time.
“I encourage Main Street investors to be open to these opportunities, but to ask good questions, demand clear answers, and apply good common sense when doing so,” Clayton said in the statement. The statement comes attached with a list of recommended questions the SEC encourages traders to ask before investing, including, “Where is my money going?” and “Is the blockchain open and public?”
The SEC has taken an interest in cryptocurrencies before, first warning against bitcoin scams in 2014. More recently, the commission has issued reports on bitcoin Ponzi schemes and best practices for ICOs. In September, the commission brought fraud charges against the company responsible for two ICOs — REcoin and DRC World — alleging the firm had misled investors.