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U.S. SEC Chair Insists A Lot Needs To Be Done To Shield Crypto Investors

source-logo  cryptovibes.com 18 May 2022 17:10, UTC

Cryptocurrency assets are very risky — said chair of the U.S. Securities and Exchange Commission, Gary Gensler on May 16. He insisted that the digital assets investors need more protection or else they could lose trust in the markets.

In general, people who buy cryptocurrency do not experience the disclosures they get when they make other asset purchases around things. They are not assured of whether they own the assets that they store in digital wallets, or whether the trading platform they are using is trading against them, Gensler said.

He spoke at the Financial Industry Regulatory Authority’s annual conference in Washington:

“We have this basic bargain: You the investing public can make your choices about the risk you take, but there is supposed to be full and fair disclosure, and people are not supposed to lie to you.”

His remarks came after last week’s outstanding crash of TerraUSD, a so-called stablecoin that lost its 1-to-1 dollar peg.

The token’s collapse sent cryptocurrencies tumbling, a fall that continued on Monday, as bitcoin erased the gains it had obtained over the weekend to trade below $30,000, far beneath its November 10 record of $69,000.

While crypto markets are seen as decentralized, the truth is that most activity occurs on a few trading platforms, which along with token issuers, need to collaborate with the SEC to enhance industry disclosures and rules, said Gensler.

He highlighted basic market principles like, “anti-fraud, anti-manipulation, making sure there’s not front-running, making sure an order book is real and not made up.”

The SEC will remain to be “a cop on the beat” while working with the Commodity Futures Trading Commission (CFTC) to make sure all cryptocurrencies are covered, Gensler said.

He concluded:

“There’s a lot to be done here, and in the meantime, the investing public is not that well protected.”

cryptovibes.com