MONTGOMERY, Ala. (WSFA) - The Alabama Securities and Exchange Commission is warning Alabama residents not to be financially influenced by social media.
The commission regulates any company where consumers deposit money, such as PayPal. There are some requirements that companies must meet to do business in Alabama, but bankruptcy violates them.
Four major cryptocurrency companies have filed for bankruptcy: Celsius, Voyager Blockfy, and the most popular FTX.
โI think these companies have been able to continue their operations because, like many companies, people learn what other people are investing in and get excited and see their friends make a profit,โ said Amanda Senn, deputy director of the commission.
But those returns are not promised, according to Senn. Cryptocurrencies are not insured like traditional currency is.
โBased on documents we have received, thousands of Alabama residents have accounts with these now bankrupt crypto companies,โ he said.
The state officially finished money transmissions with bankrupt companies. Alabama's money is now in limbo.
โIt's hopeful that some Alabamans will get at least a portion of their investment back, there's always the chance that some of these businesses could be bought out of bankruptcy,โ Senn said. "And that can be more beneficial for investors."
Senn says, meanwhile, don't invest what you can't afford to lose.
โDigital assets are really just an entry in a ledger. And they're really only worth what another investor is willing to pay that day,โ he said.
While states like Alabama regulate cryptocurrency companies, the federal government does not.
Not reading this story on the WSFA news app? Get news alerts FASTER and FREE on the Apple App Store and the google play store!
Copyright 2023 WSFA. All rights reserved.
