The head of the SEC called three ways to determine the cryptoscam

Garry Gensler-min

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler Twitter Spaces listed three ways to identify a fraudulent cryptocurrency project.

“If something looks too good to be true, sometimes it is. There are certain red flags that you can also look for,” he said.

Gensler named three signs of a potential scam:

  • the project does not have clear documentation on how it works and plans to achieve its goals;
  • the company does not demonstrate compliance with regulatory requirements;
  • the founders of the project cannot explain in simple words what it is.

The head of the SEC warned listeners against offers of high yields and calls for hasty investments, citing FOMO. He recalled that he considers most digital assets to be unregistered securities.

In October 2022 Gensler named The cryptocurrency market is centralized.

Recall that in November, a member of the US House of Representatives, Tom Emmer criticized the head of the SEC for the failure to regulate the digital asset industry, which led to collapse of FTX.

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