U.S. legislators and regulators have been warning their citizens about the investment in cryptocurrency. The securities commission of the U.S. state of Kansas too has joined the march, and has issued a warning on the risks of investments in cryptocurrency and ICOs.
On Jan. 25, the Office of Securities Commissioner – a division of the Kansas Insurance Department – issued a statement to the public that investment in cryptocurrencies, including initial coin offerings (ICOs) and futures tied to digital currencies, are not insured by the government.
As such, the commissioner warns investors to be cautious regarding investment pitfalls.
John Wine, the state’s securities commissioner, said:
“Investors should go beyond the headlines and hype to understand the risks associated with investments in cryptocurrencies, as well as cryptocurrency futures contracts and other financial products where these virtual currencies are linked in some way to the underlying investment.”
The State Department also added that that the projects which give high promises about returns, unsolicited offers, and pressure investors are mostly fraudulent and one should be beware about them.
The statement isn’t a surprise, and also shows that the U.S. regulators, state and federal are paying close attention to cryptocurrency market activities.
At law enforcement level, state level government bodies such as Texas State Securities Board and Department of Banking have recently given cease-and-desist orders to cryptocurrency banking services and initial coin offerings (ICOs), claiming the violation of financial regulations.