The US Securities and Exchange Commission on Thursday issued an official investor alert advising caution with crypto asset securities.
The regulator warned that businesses offering transactions involving crypto assets, including crypto asset securities, may not be complying with the US regulations.
It said the risk of loss for investors remained “significant”.
The only money investors should put at risk with speculative crypto investment is the money they can afford to lose entirely, it said.
Investments in crypto asset securities can be “exceptionally volatile and speculative” and the platforms where investors buy, sell, borrow or lend these securities may lack “important protections for investors”.
The cryptocurrency sector went through a troublesome year in 2022, marred by company collapses and cyber crimes, dragging the prices of digital assets and investor interest down.
One of the latest and most notable incidents was the collapse of FTX, which filed for bankruptcy on November 11.
The downfall of the exchange once valued at $32 billion rocked the entire industry and its founder Sam Bankman-Fried is facing criminal charges in the US.
The FTX crash also came at a time when the collapse of major companies Celsius Network and Three Arrows Capital after massive losses was still fresh in investors' minds.
The collapse of the Luna cryptocurrency and its associated Terra stablecoin in May, as well as job losses, have added to the industry's woes.
“Investments in crypto asset securities can be exceptionally risky … over the last year, the crypto asset space has been exceptionally volatile and a number of major platforms and crypto assets have become insolvent and/or lost value,” the SEC said.
“Investors in crypto asset securities should understand they may be deprived of key information and other important protections in connection with their investment.”
More than 46,000 people reported losing over $1 billion in cryptocurrency frauds since the start of 2021, the US Federal Trade Commission said in a report in June last year.
Nearly half of the people who reported losing digital currencies in a fraud scheme said it started with an advertisement, a post or a message on a social media platform, the commission said.
“Some promoters use social media to find and entice new investors with testimonials about returns made on deposits and investments, but what is not mentioned is that the promoter is often paying investor withdrawals out of new investor funds — a Ponzi scheme,” the SEC said.
“Moreover, recovering money from the wrongdoers can be nearly impossible. In part, that can be because of the anonymity or pseudonymity associated with crypto assets.”
In March last year, more than $600 million was stolen from Ronin Network, a side chain built for the play-to-earn game Axie Infinity. More than $30 million has been recovered, it was reported in September.
In December, more than $8 million worth of cryptocurrency was stolen from the wallets of BitKeep users in an apparent cyber attack.
Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams, leading to devastating losses, SEC said.
“Crypto asset securities-related investments continue to be replete with fraud, including bogus coin offerings, Ponzi and pyramid schemes, and outright theft where the project promoter simply disappears with investors’ money.”
SEC advised users that having an investing plan, as well as understanding their risk tolerance and time horizon, can be critical to investing success.
Some of the suggestions include creating and following an investment plan, paying off credit cards or other high interest debt first, considering the importance of asset allocation and diversification, and understanding the market risk.
“All investments have risk," the SEC said. "While some regulated institutions may offer retail investors ways to gain exposure to crypto asset securities, even when using a regulated entity, investors should ask questions and make sure they understand the terms of the investment.
"Never invest if you do not understand the product, including the risks involved."
KILLING OF QASSEM SULEIMANI
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Vaccine Progress in the Middle East
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T
Price, base: Dh840,000; Dh120,000
Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo
Transmission: Eight-speed automatic; seven-speed automatic
Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm
Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm
Fuel economy, combined: 9.9L / 100km; 11.6L / 100km
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What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
