According to CoinDesk, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has issued a warning about the risks of investing in digital assets as the crypto world and the U.S. financial sector await the SEC's decision on approving a spot bitcoin exchange-traded fund (ETF).
Gensler posted on social media, cautioning that the crypto sector is plagued by scams and fraud, and many companies in the space are not complying with securities laws.
He advised his followers to be aware of the risks associated with cryptocurrencies and noted that fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams.
It is unclear whether Gensler's warning is a final remark before the SEC approves ETF applications that are nearing key deadlines.
The approval of fully regulated spot ETFs is considered a significant turning point, as it would enable easier trading of digital assets for casual investors and potentially bring tens of billions of dollars into the industry.
The question of whether cryptocurrency businesses are properly adhering to securities law is still being determined in numerous court cases.
While some judges have found the SEC to be on the wrong side of the argument, the regulator has also had some victories, including a recent ruling in the Terraform Labs case that the SEC was correct about the company improperly promoting unregistered crypto securities.