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California’s Department of Financial Protection and Innovation has warned state citizens to “exercise extreme caution” when investing in cryptocurrency accounts with interest income.
According to the statement, the Department’s employees are working on the study of various providers of cryptocurrency income accounts – the regulator is trying to understand whether they violate state laws. It is also noted that the providers of such accounts “are not governed by the same laws as banks and credit unions”, and some platforms even refuse to withdraw funds:
“The department is warning consumers and investors that many platforms are not communicating the full extent of the risk to which investors’ crypto assets are exposed. We urge consumers to exercise extreme caution before responding to any investment and financial services offerings.”
The regulator also warned that many platforms offer investments in unregistered securities. For example, BlockFi and Voyager were banned from operating in California. A week earlier, the cryptocurrency broker Voyager Digital initiated a reorganization procedure, guided by the provisions of Chapter 11 of the US Bankruptcy Code.
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