SEC chairman reminds investors of cryptocurrency risks
With TerraUSD and LUNA falling, US Securities and Exchange Commission (SEC) chairman Gary Gensler again addressed investors with a stronger message regarding digital currencies. He continues to categorize crypto assets as speculative and reminds of the lack of protection for holders.
The main danger is the lack of information
Gary Gensler argues that potential investors don’t receive complete and fair information regarding digital assets. It leads to misperception of all the possible risks associated with cryptocurrency buying and trading.
Speaking at the FINRA conference in Washington, the chairman of the SEC questioned the entire disclosure of information when conducting cryptocurrency transactions. He also focused the attention of investors on the actual lack of ownership rights to digital assets. According to him, when using a wallet, holders transfer ownership rights to the corresponding platform, and if it falls, they can only count on a queue in the bankruptcy court.
Is decentralization conditional?
Among the possible risks of cryptocurrency, Gary Gensler mentioned insufficient decentralization. Despite all the statements about the independence of digital assets, their significant volumes are processed by only a few major players in the crypto market, which opens the way for manipulation.
Moreover, the chairman of the SEC is confident in the creation of markets by cryptocurrency exchanges against investors. “When [platforms] take care of you, when they take these tokens, they can use them and trade them. It is not like when you trade on the stock markets. They are creating markets against you.”
Gary Gensler is one of the most ardent supporters of digital currency regulation. In the past, he made several attempts to establish the principles of regulation of crypto assets by analogy with securities regulation.
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