The United States Securities and Exchange Commission’s chairman Gary Gensler reported for criticizing the cryptocurrencies within the market. There were many instances in the past as well when Gensler outspokenly opposed crypto assets, not all of them though. Recently during a US Army hosted Twitter space, he put up some advice for investment in cryptocurrencies.
Gensler echoed the general conception of crypto and remained concerned by many about it being highly speculative and an asset class with volatility. Citing the number of cryptocurrencies within the market, he said that most of them do not comply with laws and regulations. However he thinks that they should follow them.
According to the SEC chairman, the crypto asset class is generally non-compliant and as advice to investors, he suggests not to get caught to the fear of missing out (FOMO) and jump to invest in crypto.
While raising questions on the significant amount of available cryptocurrencies, he said it the market “the wild west”. As there are too many of them, there’s always this question about the use cases of the majority of tokens. He argues that out of “these 10,000 to 15,000” cryptocurrencies, most of them are going to fail.
Gensler elaborated the scenario while comparing with venture capital and new startups as they also fail. These ventures have a lot of room for failure but not for “micro currencies” to fail, citing currencies like the US dollar and European euro.
However, as mentioned earlier, there were many instances when Gensler called out cryptocurrencies and the recent one was not the first.
Last year when the crypto market witnessed one of the most significant hits in the face of the fall of Terra (LUNA) network, SEC chairman cited it and also warned that most other crypto tokens will also fail.
The stance of financial watchdog towards crypto industry is clearly seen from lawsuit against Ripple to tussle with Grayscale for not approving the spot bitcoin (BTC) ETFs, etc.
Recent action was taken up against two prominent crypto firms Genesis and Gemini. Both crypto lending platform and crypto exchange were charged for offering sale of unregistered securities to retail investors. Gemini’s crypto asset lending platform “Earn” is subjected to being accused as the reason behind the action.
Source: https://www.thecoinrepublic.com/2023/01/16/most-cryptocurrencies-going-to-fail-says-sec-chairman-gary-gensler/