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Following a dramatic meltdown in crypto markets last week, US Securities and Exchange Commission (SEC) Chairman Gary Gensler called for investor protection while calling cryptocurrencies a “highly speculative asset class.”
Gensler Warns Investors on the Risks Involved in Cryptocurrencies
Addressing the crypto market during the 2022 FINRA annual conference Monday, SEC Chairman, Gary Gensler opined that one of the big problems in the crypto space is that investors are not getting a proper disclosure of the risks involved. "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," Gensler said. His comments came after last week's catastrophic collapse of Terra’s UST stablecoin and sister token LUNA, crashing to almost zero last week, which sent the entire crypto market tumbling.
Cryptocurrencies Not as Decentralized?
In addition, Gensler, also stated that the space is not as decentralized as many people present it to be.
"This crypto asset space is not that decentralized. There's a lot of concentration. There's a handful of major trading venues and a handful of major lending venues that you, the investing public, think you're trading on or investing," he said.
The SEC will continue to be "a cop on the beat," while working with the Commodity Futures Trading Commission (CFTC) to ensure all cryptocurrencies are covered, Gensler said.
"There's a lot to be done here, and in the meantime the investing public is not that well protected," he said.