(Reuters) – Cryptocurrency assets are highly speculative and investors need more protection, otherwise they could lose confidence in the markets, Gary Gensler, chairman of the US Securities and Exchange Commission, said on Monday.
In general, people who buy cryptocurrencies do not get the revelations they get when they make other asset purchases about things like whether the trading platform they use actually trades against them, or if they actually own the assets they store in digital wallets, Mr. in Gensler.
“We have this basic purchase: you investors can make your choices about what risk you take, but it should be complete and fair disclosure, and people should not lie to you,”; he said at the Financial Industry Regulatory Authority’s annual conference in Washington. .
His comments came after last week’s spectacular collapse of TerraUSD, a so-called stablecoin that lost its 1-to-1 dollar peg.
The token crash caused cryptocurrencies to plummet, a decline that resumed on Monday, when bitcoin BTC = BTSP erased the gains it had taken over the weekend to trade below $ 30,000, well below the $ 10,000 record high of November 10.
Although crypto markets are considered decentralized, the reality is that most activity takes place on a handful of trading platforms, which along with token publishers must work with the SEC to improve industry rules and disclosure, Gensler said.
He pointed to basic market principles such as “anti-fraud, anti-tampering, making sure it is not front-running, making sure that an order book is actually real and not made up.”
The SEC will continue to be “a police force at the pace”, while working with the Commodity Futures Trading Commission to ensure that all cryptocurrencies are covered, Gensler said.
“There’s a lot to do here, and meanwhile the investor audience is not so well protected,” he said.