SEC Chairman Cautions for ‘Too Good to Be True’ Crypto Products
The Chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is cautioning investors last week about crypto lending platforms with products that seem too good to be true.
As reported by Reuter, the regulator’s warning comes after crypto lender Celsius Network’s froze withdrawals early last week, thereby setting off a downfall in the crypto space.
Gensler said:
“We’ve seen again that lending platforms are operating a little like banks. They’re saying to investors ‘Give us your crypto. We’ll give you a big return 7% or 4.5% return. How does somebody offer (such large percentage of returns) in the market today and not give a lot of disclosure?”
The Chairman added:
“I caution the public. If it seems too good to be true, it just may well be too good to be true.”
Investors are currently moving in a risk-off environment, with rising inflation, falling tech stocks, ongoing Covid-19 fears, geopolitical unrest and regulatory uncertainty all playing a role.
This Saturday, the price of Bitcoin hit a new low not experienced since November 2020.
Meanwhile, commenting on the crypto market sell-off, a U.S. Treasury Department official highlighted the explicit need for cryptocurrency regulation. Making it clear that the Treasury Department is “monitoring activity in the crypto market,” the official was quoted by Reuters:
“We believe the recent turmoil only underscores the urgent need for regulatory frameworks that mitigate the risks that digital assets pose.”
The official continued:
“We continue to work closely with our regulatory partners, as they take action under their existing authorities, and offer guidance and expertise as Congress considers legislation to further address these risks.”
The post SEC Chairman Cautions for ‘Too Good to Be True’ Crypto Products appeared first on iGaming.org.
Source: igaming
