US financial regulators warn against crypto exposure in retirement accounts

cointelegraph.com:

Three financial watchdogs in the United States have issued a warning to investors considering certain individual retirement accounts with exposure to cryptocurrencies.

In a Feb. 7 notice, the United States Securities and Exchange Commission’s Office of Investor Education and Advocacy, the North American Securities Administrators Association, and Financial Industry Regulatory Authority said self-directed individual retirement accounts, or IRAs, may include assets with potential risks, including cryptocurrencies. According to the agencies, some of the aforementioned IRAs could offer exposure to crypto assets that qualify as securities “without SEC registration or a valid exemption from registration” and without providing the information necessary to make informed decisions on investments.

“Some self-directed IRAs may offer investments in ‘crypto assets’ such as ‘virtual currencies,’ ‘coins,’ and ‘tokens’,” said the notice. “Many of the trading platforms for these crypto assets refer to themselves as ‘exchanges,’ which may give investors the misimpression that they have registered with the SEC.”

INVESTOR ALERT: Self-directed IRAs allow investment in a broader and potentially riskier portfolio of assets than other types of IRAs. Make sure you know the risks and what to look out for before you invest in a #SelfDirectedIRA. https://t.co/wRibNOlHAu pic.twitter.com/bxKadYNDrO

Many lawmakers and regulators have targeted crypto investments, both in and out of retirement accounts, following a tumultuous year of crypto firms filing for bankruptcy and prominent fraud cases like that of former FTX CEO Sam Bankman-Fried. In November, New York Attorney General Letitia James recommended prohibiting crypto investments in defined contribution