SEC Rings Alarm on Crypto Rush Ahead of Bitcoin ETF Decision, What Did It Say?
The United States Securities and Exchange Commission (SEC) has enhanced once again its cautionary stance on FOMO-driven crypto investments, a timely advisory arriving just days before the highly anticipated approval decision on spot Bitcoin exchange-traded funds (ETFs).
In a recent statement shared via X, the SEC’s Office of Investor Education underscored the risks inherent in digital assets. The advisory encompassed a broad spectrum, encompassing meme stocks, cryptocurrencies, and non-fungible tokens (NFTs), urging retail investors to tread cautiously.
This isn’t the first appearance of the “Say no go to FOMO” advisory. It actually surfaced initially on January 23, 2021, according to Cointelegraph, during a fervent bull market in both crypto and equities. This period witnessed record-breaking highs for Bitcoin, Ether, and numerous altcoins by November 2021. The warning resurfaced in March 2022 as market temperatures cooled.
Notably, speculation among social media circles has surged regarding the advisory’s timing vis-a-vis the imminent approval of spot Bitcoin ETFs. The decision, slated before the January 10 deadline, holds considerable market interest.
The SEC’s counsel explicitly cautioned against making investment decisions solely based on endorsements from celebrities or influencers. The warning spotlighted the lure of investments championed by popular figures, advising investors to exercise prudence and refrain from following recommendations blindly. In fact, the regulator’s actions have extended beyond advisories, with past instances of penalizing celebrities for endorsing certain cryptocurrencies. Kim Kardashian, for instance, along with other celebrities, settled a $1.26 million fine with the SEC on October 3 last year for not disclosing a payment of $250,000 received to promote a dubious token, Ethereum Max (EMAX), to her vast Instagram following.
In addition to that, the regulatory agency also claims that Sun engaged in manipulative trading practices and unlawfully touted the tokens.
Sun enlisted the help of several celebrities, including Soulja Boy, Austin Mahone, Lindsay Lohan, Jake Paul, and Akon, to promote TRX and BTT, further driving public interest in these tokens.
The report also stressed the potential volatility associated with assets swayed by trends and influencers. It cautioned investors about the allure of such assets and the subsequent rapid accumulation of losses when the market pivots away from these trends.
The SEC’s reissued warning serves as a timely reminder amidst the looming ETF decision, signaling the regulator’s vigilance. However, the crypto community remains extremely excited, as it awaits the final decision that is bound to take place in the next few days.
