The Expert Podcast

The SEC's Crypto Crackdown: When Digital Assets Become Illegal Securities
All right here we go again here's another platform where people have sent tens of millions of dollars for an investment that may be going south or being investigated the SEC the major U.S government investigative agency the Securities and Exchange Commission is looking into coinbase one of the largest platforms to see if there's any violations and this all comes down to something we see a lot with investigative efforts for scams and fraud when somebody puts money into something whether you call it an investment or not whenever you put money in it has the risk of losing that money and if there's an opportunity to make money that's an investment that's profit that's fine and if you have the opportunity to lose money that's part of the risk.
The big question is is it a security and a security is a legal definition of a certain type of vehicle that allows for an investor to put money into something and make a profit and a security has to have certain requirements has to have certain disclosures and it has to be sold by a registered Securities agent a bunch of other things again we're not attorneys we're not giving you legal advice but a lot of times when we have a client that comes to us for an investigation that has lost money the question is did the person or company that solicited that money represent that they had a Security even if they didn't call it a security by definition of the features is it a security.
And sometimes the companies misrepresent something that really isn't security and they know it is and they don't classify it that way to get around disclosures and protections sometimes they don't even know there's many companies that don't even know that what they're doing is selling a security without a license so if you have any time you're putting money into something with the opportunity that's going to go up and the risk it might go down you have to ask yourself does this qualify as a definition of a security and if it is is it being marketed that way are they licensed that's a big red flag if something isn't security whether they call it or not and they're not licensed that's a red flag that if they're doing that wrong what else are they doing wrong.
Again we're not sure you know we don't know if coinbase is is um what their deal is but they're being investigated there's no you know definitive answer if it's right or wrong but even things like that nria real estate Fiasco being investigated file bankruptcy that was something that wasn't a security sometimes defined as a security other times and in many cases an investment company can evade Securities by calling somebody um qualified investor where they have certain amount of financial assets certain amount of income where they don't have to abide by Securities laws.
Again anytime you're putting money into something that is designed to make a profit but could also take a loss you have to look at it is this something that is under the definition of a security and if it is are the presenters of this doing all they need to do to make sure they abide by Securities laws this can prevent a lot of losses through these scams and frauds and if you have the experience of losing money on one of these scams let us know in the comments below or contact us on our website.