08.14.18
SEC Issues Warning About IRA Fraud and Cryptocurrencies
by: Julie Halpert
In an August 8 Investor Alert, the SEC warned that assets in traditional IRAs generally fall under the agency's oversight, but that is not the case with self-directed IRAs, which lack transparency.
Although the IRS requires that a self-directed IRA be set up by an authorized custodian, they don't validate the legitimacy of the investment, so there's a potential to be scammed. The SEC said there wasn't a single event that led the agency to issue the new warning, but Lori Schock, director of the SEC's Office of Investor Education and Advocacy, said in an interview, "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."
Read the full article on CNBC