(Reporting by Hannah Lang in Washington; Editing by Richard Chang)
(Updates throughout, adds byline)
By Hannah Lang
March 23 (Reuters) - The U.S. Securities and Exchange
Commission on Thursday issued an investor alert warning that
firms offering crypto asset securities may not be complying with
U.S. laws.
Unregistered offerings of such securities may not provide
important data, including audited financial statements, for
informed decision making, the SEC said.
The securities watchdog has been cracking down on the crypto
industry, which its chair has called a "Wild West" riddled with
misconduct. Its efforts gathered pace after November's collapse
of Sam Bankman-Fried's cryptocurrency exchange FTX.
Crypto exchange Coinbase announced on Wednesday
that it had received a Wells notice - a formal declaration that
SEC staff intend to recommend an enforcement action.
In its investor alert, the SEC also warned investors about
"proof of reserves" services offered by some crypto exchanges
that are supposed to let users verify that an exchange has
enough assets to back customers' holdings.
"Crypto asset entities might use these in lieu of audited
financial statements in order to obscure and confuse customers
about the safety of their assets," the SEC said.
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