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Because of the speculative nature of cryptocurrencies, investors need more protection or they could lose confidence in the markets. This was stated by the head of the SEC Gary Gensler, writes Reuters.
Cryptocurrency buyers generally don’t get as much information as is typical for other asset classes, the official said. For example, this applies to the trading platforms used or whether users actually own the funds in their digital wallets, Gensler added.
“We have a fundamental deal: you, the investors, can make choices about acceptable risk, but the disclosures are supposed to be full and honest. People shouldn’t lie to you,” Gensler said during the annual financial regulators’ conference in Washington.
Cryptocurrency markets are considered decentralized, he said, but in reality much of the activity takes place on a few large trading floors. Along with token issuers, they should work with the SEC to improve industry rules and inform consumers, Gensler believes.
Regarding crypto platforms, he recalled the need for basic market principles such as “anti-fraud, countering manipulation and insider practices, ensuring a real, not fictitious, order book.”
Gensler noted that the SEC would continue to cooperate with CFTC For oversight coverage of all types of cryptocurrencies.
“There’s a lot of work to be done here, and so far investors are not so well protected,” he concluded.
Recall that in May, the regulator allocated 20 additional positions to the core Crypto Assets and Cyber Unit.
SEC Commissioner Hester Pierce criticized the agency’s decision.