SEC issues new FOMO warning on crypto amid Bitcoin ETF anticipation

No to FOMO: The United States Securities and Exchange Commission (SEC) has reiterated its cautionary stance on FOMO-driven cryptocurrency investments, right before its decision on the approval of spot Bitcoin exchange-traded funds (ETFs).

In a statement released on January 6 via its official Twitter account, the SEC's Office of Investor Education underlined the inherent risks of digital assets, including cryptocurrencies, meme tokens, and nonfungible tokens (NFTs).

This advisory message, titled ‘Say No to FOMO,’ was initially published on January 23, 2021, during a buoyant phase in both the cryptocurrency and equities markets. The SEC reissued the warning around March 2022, as market enthusiasm began to wane.

After this message, speculations around SEC's Bitcoin ETF decision, which is expected to be announced before January 10, has increased.

Do not invest in speculations

The SEC's advisory explicitly cautioned against making investment decisions solely based on endorsements from celebrities, athletes, or social media influencers. The statement highlighted instances where notable figures faced regulatory penalties for promoting cryptocurrencies without adequate disclosures. For instance, Kim Kardashian recently settled a $1.26 million fine with the SEC for promoting Ethereum Max (EMAX) without revealing financial incentives.

The advisory further said that the volatility inherent in assets is influenced by fleeting trends and celebrity endorsements. It posed a rhetorical question to investors, asking them to contemplate the repercussions of substantial value erosion quickly.