SEC Chair Gary Gensler on Monday said the crypto market needs more regulation to protect investors from projects like Terra.
Gensler blames crypto trading and crypto wallet platforms for not disclosing information making investors lose hard-earned money such as in the case of LUNA and UST.
SEC Chair Gary Gensler believes cryptocurrencies are high speculative and most activities happen on only a selected number of trading platforms. Therefore, it is highly recommended for trading platforms and token issuers to work with the SEC to protect retail investors as well as institutions through a set of rules and disclosures.
SEC Chair Says Crypto Rules and Disclosures Needed to Protect Investors
Speaking at the Financial Industry Regulatory Authority’s annual conference in Washington, Gensler claimed the crypto market is not decentralized as only a few crypto trading platforms control the market, a report from Reuters shows. Moreover, these crypto trading platforms and crypto wallet firms need to disclose information to investors. Disclosures will help investors actually believe that a trading platform is not trading against them and assets stored in wallets are actually owned by them.
“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.”
He says the SEC is working with the Commodity Futures Trading Commission to protect investors trading in cryptocurrencies, including bitcoin, by regulating them. Meanwhile, crypto firms should ensure an order book is real and not fake. Moreover, crypto trading firms should follow basic market principles such as anti-fraud, anti-manipulation, and no front-running or tailgating to protect investors.
Gary Gensler thinks the crypto investors are not yet well protected, and more protections could improve investors’ trust in the market.
The comments came after the LUNA price falls 99% in two days as Terra’s UST stable coin lost its peg with the U.S. dollar. It resulted in a crypto market crash, making investors lose billions.
Gensler Remains a Critic of Cryptocurrencies
SEC Chair Gary Gensler has always believed stable coins should be regulated as it is used to trade in and out of different cryptocurrencies. He has been a strong advocate for regulating crypto and applying the definition of securities. However, now he has asked crypto trading platforms to register with the SEC to comply with investor protection.
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