SEC Issues Statement against Unlawful Online Platforms
April 26, 2018
In a public statement issued March 7, the Securities and Exchange Commission’s (“SEC”) Divisions of Enforcement and Trading and Markets warned about using illegal online platforms for trading digital assets. According to the SEC, more investors are using online platforms to buy and sell digital assets such as those sold in Initial Coin Offerings. The online platforms regularly claim that investors can rapidly purchase and sell digital assets.
The statement encourages investors to consider asking several questions before trading digital assets via an online trading platform. Investors should ask whether the platform is registered as a national securities exchange; how the platform selects digital holdings for trading; and if there is any information in FINRA’s BrokerCheck regarding individuals or firms managing the platform.