Cryptocurrencies Not Federally Insured, Warns Alaska State Regulatorbr>
Alaska state securities regulator has issued a warning about the risks associated with cryptocurrency investments.
Kevin Anselm, director of Alaska’s Division of Banking and Securities, cautioned Alaskan investors about investments involving cryptocurrencies. She said cryptocurrencies are subject to minimal regulatory oversight and that they’re susceptible to cybersecurity breaches or hacks. She also said that cryptocurrencies are not federally insured and that there may be no recourse should the cryptocurrency disappear.
(Editor’s note: Ms. Anselm is a woman, despite the unusual first name).
“People need to understand what it is they’re really investing in and what they can expect – and what the offerer is offering – as a return,” she said.
The regulator said investors should aks questions before putting money into companies linked to the crypto space, as cryptocurrencies aren’t typical investments.
“What exactly do I get for my investments?” she said. “Will it be tangible? Is it kept in some sort of a blockchain? And if it’s in a blockchain, what is a blockchain and how does that operate with your investments?”
Anselm said that the division decided to issue a warning after hearing anecdotal reports of Alaskan residents being asked to buy into new cryptocurrencies.
“We’re seeing a number of people contacted by sellers of virtual currencies or sellers that want people to get in on initial coin offerings (ICO), including virtual currencies,” she said.