The head of the US Securities and Exchange Commission, which is responsible for supervising securities trading in the US, is in an interview with CNN very negative about cryptocurrency. – It is almost synonymous with fraud and deception, he writes.
Furthermore, he believes that cryptocurrency can be considered a form of securities, which makes it relevant for the SEC to follow. The confusing regulatory framework for crypto has been the subject of several lawsuits and investigations in recent years, and the jurisdiction it falls under remains unclear.
- Head of the US Securities and Exchange Commission
- Educated at Wharton Business School
- Has previously worked for 18 years at Goldman Sachs
- Is next to the job in SEC professor at MIT (Massachusetts Institute Of Technology).
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risk
According to Gensler, it is not possible for crypto investors to make good risk assessments of investing in cryptocurrencies, as there is not enough good information available.
– If you want to invest in digital, scarce and speculative securities, then that’s fine. Right now we just do not see enough investor protection, and the crypto market is like the Wild West, he writes.
The crypto market has a total value of 1.6 trillion dollars, which makes it relatively small compared to the US stock market. At the same time, Gensler believes that this is not an argument that it does not need to be regulated. He fears that if no one takes a stand on the issue, it will have catastrophic consequences for many people.
Stablecoins
One aspect of cryptocurrency that the SEC chief has a particularly negative view of is so-called “stack coins”. A stack coin is linked to another more stable asset, such as gold or the US dollar. The purpose of this is to make the cryptocurrency less volatile, so that it can be used as a means of payment.
In July, 75 percent of cryptocurrency trading was done between stack coins and other digital currencies, instead of regular currencies such as the dollar. According to Gensler, this may indicate that crypto investors use stack coins to set aside the traditional banking system to avoid anti-money laundering rules and taxes.
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