• SEC chairman Jay Clayton weighed in on the crypto-mania sweeping Wall Street in a statement Monday.
  • Clayton warned investors about threats associated with cryptocurrencies and ICOs, a crypto-based fundraising method.

Jay Clayton, the chairman of the US Securities and Exchange Committee, weighed in on the crypto-mania sweeping Wall Street in a statement Monday.

"The world's social media platforms and financial markets are abuzz about cryptocurrencies and initial coin offerings," Clayton said. "There are tales of fortunes made and dreamed to be made."

The market for cryptocurrencies has reached new heights in 2017, with bitcoin appreciating over $1,500% and gaining its own futures market. Initial coin offerings, a cryptocurrency-based twist on the initial public offering fundraising process, have raised more than $3 billion by some estimates. And Wall Street and Main Street are in a frenzy.

But Clayton wants investors to take off the rose-tinted glasses and approach the highly unregulated space with great caution. He emphasized that not a single initial coin offering has registered with the SEC. Here's Clayton (emphasis his own):

"Investors should understand that to date no initial coin offerings have been registered with the SEC.  The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. If any person today tells you otherwise, be especially wary."

"Many of these assertions appear to elevate form over substance," he said. "Merely calling a token a "utility" token or structuring it to provide some utility does not prevent the token from being a security."

The international nature of cryptocurrencies can also pose a threat to investors, Clayton said:

"Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds."

Still, Clayton recognizes the revolutionary potential of cryptocurrencies and blockchain.

"The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing," he said. "I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike."

This post originally appeared on Business Insider.