SEC Warns Against Retirement Funds Investing in Cryptocurrency
- In other news, the Japanese financial watchdog is unhappy with the results of its inspections of cryptocurrency exchanges.
The Office of Investor Education and Advocacy, a branch of the US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission, has issued an investor alert regarding self-directed individual retirement accounts that promote investment in cryptocurrency.
Disclaim most duties to investors
IRAs are savings accounts with certain tax advantages that are intended to be accessed at the time of the saver's retirement.
A self-directed IRA is one that allows alternative investments. These include real estate, company stocks, intellectual property and precious metals, and, more recently, Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. The main difference between self-directed and regular IRAs is that the latter are handled by Internal Revenue Service-approved custodians while the former are held by custodians that "disclaim most duties to investors", according to the warning.
"misimpression that they are regulated by the SEC"
The warning states that the allure of digital assets and initial coin offerings can be used by fraudsters. It acknowledges that such investments can be "fair and lawful", but says that they "may not provide complete or accurate information to aid investors in making informed decisions."
The warning says that holders of self-directed IRAs are more at risk than usual because the custodians of these funds "typically have only limited duties to investigate the assets or the background of the promoter." Scam artists can take advantage of this by telling investors that they can be trusted because the custodian approved them, when in fact this is not necessarily the case.
It adds that there is also an increased risk of investors being passive in their examination of their investments because they are not allowed to access the money before a certain age.
The sloppy reality of Japanese cryptocurrency exchanges
The Japanese Financial Services Agency, that country's financial regulator, released the results of its inspections of local cryptocurrency exchanges.
After reviewing 23 entities, the watchdog found a "sloppy reality", according to Nikkei. In many cases, companies' systems had failed to keep up with their growth in trading volumes, which have grown six-fold in the space of one year. The figure now stands at 792.8 billion yen ($7.1 billion), and most exchanges employee less than 20 people.
The watchdog said that there are currently hundreds of companies awaiting review, and it has decided to be stricter on them as a result of its investigations.
The FSA began its inspections after the massive hack of Coincheck earlier this year.
The Office of Investor Education and Advocacy, a branch of the US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission, has issued an investor alert regarding self-directed individual retirement accounts that promote investment in cryptocurrency.
Disclaim most duties to investors
IRAs are savings accounts with certain tax advantages that are intended to be accessed at the time of the saver's retirement.
A self-directed IRA is one that allows alternative investments. These include real estate, company stocks, intellectual property and precious metals, and, more recently, Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. The main difference between self-directed and regular IRAs is that the latter are handled by Internal Revenue Service-approved custodians while the former are held by custodians that "disclaim most duties to investors", according to the warning.
"misimpression that they are regulated by the SEC"
The warning states that the allure of digital assets and initial coin offerings can be used by fraudsters. It acknowledges that such investments can be "fair and lawful", but says that they "may not provide complete or accurate information to aid investors in making informed decisions."
The warning says that holders of self-directed IRAs are more at risk than usual because the custodians of these funds "typically have only limited duties to investigate the assets or the background of the promoter." Scam artists can take advantage of this by telling investors that they can be trusted because the custodian approved them, when in fact this is not necessarily the case.
It adds that there is also an increased risk of investors being passive in their examination of their investments because they are not allowed to access the money before a certain age.
The sloppy reality of Japanese cryptocurrency exchanges
The Japanese Financial Services Agency, that country's financial regulator, released the results of its inspections of local cryptocurrency exchanges.
After reviewing 23 entities, the watchdog found a "sloppy reality", according to Nikkei. In many cases, companies' systems had failed to keep up with their growth in trading volumes, which have grown six-fold in the space of one year. The figure now stands at 792.8 billion yen ($7.1 billion), and most exchanges employee less than 20 people.
The watchdog said that there are currently hundreds of companies awaiting review, and it has decided to be stricter on them as a result of its investigations.
The FSA began its inspections after the massive hack of Coincheck earlier this year.