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SEC Chair Claims Crypto Carries “Very Significant” Risk

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AT Thursday Interview with CNBC, U.S. Securities and Exchange Commission Chairman Gary Gensler said there is a “very significant” risk in the cryptocurrency space.

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Gensler confirmed that he is neutral when it comes to cryptocurrency technology, but he is not neutral when it comes to protecting investors. He stressed that cryptocurrencies are a highly speculative asset class.

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The government official also stressed that most of the existing tokens are securities, as they were launched by a group of sponsored entrepreneurs who collect money from the public. Gensler confirmed last month that bitcoin is the commodity that separates it from other cryptocurrencies.

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At the same time, the SEC chairman remained silent on the regulatory status of Ethereum. The agency distanced itself from a speech by Willian Hinman in which a former high-ranking official declared Ethereum a non-security. Critics believe that such an assessment has confused the regulatory waters.

The SEC chairman also said that cryptocurrency lending companies could be investment companies.

He pointed to the fact that credit companies offer “quite high returns” but the question remains how they do it. “What is behind these promises?” Gensler asked.

The SEC boss says his agency will remain focused on properly registering such lending firms under securities laws to protect the public. Earlier this week, in an interview with Bloomberg, he noted that there were “a lot of violations” in the crypto industry.

According to Cryptooshala, Gensler said that the SEC can use exclusive powers to regulate cryptocurrencies. He also warned investors against promising exorbitant returns.





Credit : u.today

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