The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has warned that most cryptocurrencies will fail. He urged investors to “not get caught up in FOMO – fear of missing out”. He emphasized that cryptocurrency is a highly speculative, unregulated asset class.
Gary Gensler predicts the downfall of most cryptocurrencies
SEC Chairman Gary Gensler gave advice on cryptocurrency investments at a Twitter forum organized by the US military on Wednesday.
The crypto “highly speculative, volatile asset class” called Gensler emphasized that most cryptocurrencies “does not comply with the securities laws, even though they should“. He noted that the crypto sector “it’s like the wild west” and also questioned the use cases of most tokens.
The head of the SEC warned:
“Even 10,000 or 15,000 tokens can fail. This will happen because the money invested by venture capitalists will be lost, and new startups will also fail. But also because history shows that there is not much room for micro-currencies, so, you know, we have the US dollar, and Europe has the euro and so on.” he explained.
He emphasized that the cryptocurrency “usually not appropriate“, Gensler continued to advise investors:
“Don’t fall into FOMO, the fear of missing out. Please don’t be fooled.”
This was not the first time that Gensler warned about the failure of crypto tokens. Last May, following the collapse of the Terra/Luna ecosystem, he similarly warned that many crypto tokens would go bankrupt.
The head of the SEC has already been criticized by lawmakers and crypto-sector players for taking an executive-centric approach to regulating the crypto industry. Last November, Gensler confirmed that the Securities and Exchange Commission’s enforcement division would continue to focus on crypto.
This week, anyway, the SEC charged also against two prominent crypto companies – Gemini and Genesis. The accusation is that “a Offering and selling unregistered securities to retail investors through the Gemini Earn crypto-asset lending program is illegal“.
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