Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

SEC Issues Warning About Cryptocurrencies, IRA Fraud

The United States Securities and Exchange Commission (SEC) recently issued an investor warning about the growing risks posed by unregistered IRAs and the growing levels of investment in cryptocurrencies.

According to the SEC, the unregistered IRA market is estimated at approximately $100 billion in value, and while it gives people the opportunity to invest in properties outside the stock market like cryptocurrencies, private company stock, precious metals, and more, there is considerable risk in doing so. In its warning, the SEC reminded investors that these self-directed IRAs do not fall under the agency’s oversight – while there wasn’t a single event that pushed the agency to issue this warning, the entrance of cryptocurrency into the mainstream pushed it to update consumers to the potential risks.

"Now that some self-directed IRAs include digital assets — cryptocurrencies, coins and tokens, such as those offered in so-called initial coin offerings — we think it is important to alert investors about the potential risks and fraud involved with these kinds of investments that may not be registered," Director of the SEC's Office of Investor Education and Advocacy Lori Schock said in an interview with CNBC.

This is not the first time that the SEC has issued a warning to investors about cryptocurrency. Earlier this year, the agency stated that investors needed to use caution when diving into this new type of investment, especially since many of these exchanges are not regulated.

In its latest warning, the SEC noted that while self-directed IRAs are required to be set up by authorized custodians, these individuals don’t validate the legitimacy of any given investment which can increase the risk of being scammed. With a growing number of people from the baby boomer generation moving into retirement, the issue is growing as the potential number of targets grows in size. One key red flag to look out for, according to Executive Director of the Retirement Industry Trust Association Mary Mohr, is when promoters say that an investment was approved by the IRS – the IRS does not approve assets. Most importantly, any time an investment seems too good to be true, there’s a high likelihood that it is, and it actually a scam.

The SEC included a number of tips and examples of fraud in its investor warning, which can be found here. If you were the victim of fraud, our investment fraud lawyers at Meyer Wilson are ready to hear your story. With nearly two decades of experience under our belts, we understand what it takes to fight for and secure the maximum compensation possible. Since our firm first opened its doors, we have successfully recovered more than $350 million for our clients. Fill out our online form to schedule a free, in-depth consultation with a member of our firm.

Related Posts:

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram