Despite the increase in both popularity and accessibility of cryptocurrency investments in the recent years, there remains a startling lack of clarity about the primary function or use of cryptocurrency. This has led many to draw parallels between cryptocurrency and gold. Both are seen as valuable due to their perceived scarcity, but unlike cryptocurrency, gold has centuries of tried and tested utility and value standing behind it and numerous utilitarian applications.
Where investments are concerned, whether in cryptocurrency, gold, or any other speculative markets, it’s crucial to undertake at least a rudimentary check on the so-called ‘investment professionals’ facilitating these transactions. On this front, the U.S. Securities and Exchange Commission operates a platform that allows potential investors to verify either individuals or firms. You can glean information about their licenses, such as whether they’re registered with the SEC, with individual states, or the Financial Industry Regulatory Authority. Notably, the platform also represents a repository for business operation disclosures, known as Form ADV, which exempt investment advisers are required to complete.
For additional insight into advisers’ background, the SEC platform operates a search tool that discloses past state securities regulator registrations, criminal convictions, regulatory events, and involvement in civil litigation. A simple precautionary step that might take a few moments could potentially save thousands of dollars.
Case in point: The SEC recently charged Richard Heart, otherwise known as Richard Schueler, for allegedly conducting unregistered offerings of cryptocurrency asset securities to raise over $1 billion in crypto assets from investors, according to a recent SEC press release. It is alleged that Mr. Heart misappropriated millions from investors, using these funds to purchase luxury items. Interestingly, neither “Richard Heart” nor “Richard Schueler” appear in the SEC’s Investor.gov search tool.
Whilst the SEC’s system isn’t infallible, it’s far safer for investors who require assistance to use a licensed, registered investment adviser. Even more ideally, investors would be better off knowing more about their adviser’s background before allowing them to manage any funds.
Many retail investors are oblivious to tools and safeguards offered by the SEC. It’s vital to share this valuable resource with others, particularly with those who may be vulnerable to investment scams. Using the SEC’s system isn’t just straightforward and fast, it could potentially save you a significant amount of hassle and financial loss.
Original article written by Jonathan Wolf, a civil litigator and author.