SEC Issues New Warning About Unregistered IRAs Fraud and Cryptocurrencies
With increasing appearance of bitcoin and other cryptocurrencies in retirement accounts, the Securities and Exchange Commission has issued a new warning.
Unregistered IRAs, which now represent a $100 billion market, allows people to invest far outside core stock market and bond market holdings.
According to SEC no single event led the agency to issue the new warnings. Lori Schock, director of the SEC’s Office of Investor Education and Advocacy, told CNBC:
“Now that some self-directed IRAs include digital assets cryptocurrencies, coins, and tokens, such as those offered in so-called initial coin offerings we think it is important to alert investors about the potential risks and fraud involved with these kinds of investments that may not be registered.”
These IRAs are often invested in real estate, private mortgages, precious metals and private company stock.
SEC further warns that assets in traditional IRAs stocks, bonds, and mutual funds, generally fall under the agency’s oversight, but that is not the case with self-directed IRAs, which lack transparency.
The SEC joins the Association of International Certified Professional Accountants to warn about this fraud indicating that the types of investments permitted in a self-directed IRA can be ripe for elder abuse.
Get Bitzamp Latest Update By Downloading our Mobile App: Bitzamp – Cryptocurrency News – Apps on Google Play