SEC Charges Crypto Exchange with Securities Fraud, Warns Investors About Risks of Digital Assets

The U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has charged a cryptocurrency exchange with securities fraud, alleging that it defrauded investors by selling unregistered securities.

The SEC alleges that the exchange, which operates in the United States and has over 1.1 million users, sold more than $1 billion in unregistered securities to investors without providing them with the required disclosures and protections. The SEC alleges that the exchange failed to register the securities with the agency as required by law, and that it misled investors about the risks and returns of the investments.

"We allege that this exchange engaged in a massive securities fraud scheme that defrauded investors out of millions of dollars," said SEC Chair Gary Gensler in a statement. "The SEC is committed to protecting investors from fraud and ensuring that they have access to accurate and complete information about the securities they are investing in."

The SEC has charged the exchange and its CEO with securities fraud and is seeking to halt the alleged fraudulent scheme and recover the proceeds for investors. The SEC is also seeking to permanently enjoin the exchange from engaging in further securities fraud.

Earlier this year, the SEC had issued a warning to investors about the risks of investing in cryptocurrencies and urged them to be cautious when considering investments in digital assets. The SEC has also been cracking down on cryptocurrency exchanges and other digital asset platforms, with several exchanges facing legal action for failing to comply with securities laws.

The full image of the announcement can be seen below: