SEC tells financial professionals that crypto assets demand ‘heightened scrutiny’ News ▸ US ▸ Regulation
SEC tells financial professionals that crypto assets demand ‘heightened scrutiny’
The SEC aims to influence how financial advisors recommend investments.
1 min read
Updated: Apr. 21, 2023 at 1:48 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The U.S. Securities and Exchange Commission (SEC) advised finance professionals to thoroughly understand the risks of crypto on April 20.
In one section of a bulletin, the SEC told broker-dealers and investment advisors that certain products are complex and carry additional risk.
The regulator named cryptocurrencies, or “crypto asset securities,” as one class of assets that require “heightened scrutiny” from financial professionals.
It also named inverse or leveraged exchange-traded products (ETPs), margin-traded instruments, derivatives, penny stocks, and various other assets and investment vehicles as examples of investments that carry additional risk.
The bulletin is intended to influence how financial professionals recommend certain assets to retail investors. It does not represent a regulatory policy.
The SEC has nevertheless carried out enforcement action toward the crypto industry on a regular basis. The regulator most recently filed charges against Bittrex following earlier actions against many other cryptocurrency companies.
Meanwhile, SEC chair Gary Gensler was questioned by Republican lawmakers over his agency’s harsh stance toward the cryptocurrency industry.
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Author 
Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.