The United States Securities and Exchange Commission (SEC) has reiterated its warning about the dangers of fear of missing out (FOMO) investing, advising investors to tread carefully. This cautionary advice comes just before the commission’s announcement on the approval of pending spot Bitcoin ETFs.
The SEC’s Office of Investor Education and Advocacy issued the warning, which is the fifth of its kind, highlighting the risks associated with digital assets such as meme coins, meme stocks, non-fungible tokens (NFTs), and cryptocurrencies. The advisory stated, “Digital assets include cryptocurrencies, coins, and tokens like those offered in initial coin offerings (ICOs). Meme stocks may be based on internet popularity and social views instead of a traditional stock value, such as a company’s performance. And, let’s not forget about NFTs (non-fungible tokens).”
The “Say no go to FOMO” series first appeared on the 23rd of January, 2021, during a significant bull run that saw Bitcoin (BTC), Ether (ETH), and several other altcoins reach new all-time highs. The warning was reissued in March 2022 when the markets were on a downward trajectory.
In the latest post, SEC director Lori Schock advised investors to resist the growing interest in digital assets. Schock also urged investors not to base their investment decisions on factors such as celebrity endorsements and recommendations by social media influencers or entertainers. She emphasized the risks posed by market swings, volatility, and more.
The issue of scam projects being endorsed by celebrities is not new. Several high-profile personalities have promoted questionable projects, resulting in significant losses for those who invested in them. For instance, Kim Kardashian agreed to pay a fine of $1.26 million to the SEC on the 3rd of October last year after failing to disclose that she was paid $250,000 to promote a scam token called Ethereum Max (EMAX) to her followers. The SEC has also reprimanded several other personalities for promoting similar projects.
The SEC’s statement comes just days before it decides on applications for a spot Bitcoin ETF. An announcement is expected by Wednesday, the 10th of January, potentially paving the way for a spot Bitcoin ETF to start as early as the 11th of January. Several major financial institutions are hopeful of getting approval for their respective funds.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Kim Kardashian, Lori Schock |
| Companies | Office of Investor Education and Advocacy, United States Securities and Exchange Commission |
| Currencies | Bitcoin, Ethereum, Lido Staked Ether |
| Securities | None |
