SEC Chair Warns of ‘Too Good to Be True’ Crypto Products — US Treasury Calls for Urgent Regulation

The president of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has warned the nationalist astir crypto investments that look “too bully to beryllium true.” Meanwhile, the U.S. Treasury Department says that the caller crypto marketplace turmoil underscores the urgent request for regulatory frameworks that mitigate the risks posed by integer assets.

SEC Chair Gensler’s Crypto Warning

SEC Chairman Gary Gensler cautioned investors past week astir crypto lending platforms offering products that look excessively bully to beryllium true, Reuters reported.

The securities regulator’s informing followed crypto lender Celsius Network’s withdrawal freeze aboriginal past week.

“We’ve seen again that lending platforms are operating a small similar banks. They’re saying to investors ‘Give america your crypto. We’ll springiness you a large instrumentality 7% oregon 4.5% return,'” Gensler was quoted arsenic saying. “How does idiosyncratic connection (such ample percent of returns) successful the marketplace contiguous and not springiness a batch of disclosure?”

The SEC seat stressed:

I caution the public. If it seems excessively bully to beryllium true, it conscionable whitethorn good beryllium excessively bully to beryllium true.

The SEC and respective authorities securities regulators are presently investigating Celsius Network’s determination to frost withdrawals. According to reports, the institution subsequently hired Citigroup arsenic an advisor and sought assistance from Akin Gump Strauss Hauer & Feld, a instrumentality steadfast that specializes successful fiscal restructuring.

Following Celsius, Hong Kong-based Babel Finance temporarily suspended withdrawals and redemptions of its crypto products.

Treasury Official Stresses Urgent Need for Crypto Regulatory Frameworks

The illness of cryptocurrency terra (LUNA) and stablecoin terrausd (UST) successful aboriginal May and troubles astatine crypto lending platforms person shaken the crypto market.

Bitcoin fell beneath $20K for the archetypal clip since 2020 this play arsenic the wide crypto marketplace shed implicit a trillion dollars successful marketplace capitalization since mid-April.

Following the crypto marketplace sell-off, an authoritative with the U.S. Treasury Department highlighted the urgent request for cryptocurrency regularisation past week. Nothing that the Treasury Department is “monitoring enactment successful the crypto market,” the authoritative told Reuters:

We judge the caller turmoil lone underscores the urgent request for regulatory frameworks that mitigate the risks that integer assets pose.

“We proceed to enactment intimately with our regulatory partners, arsenic they instrumentality enactment nether their existing authorities, and connection guidance and expertise arsenic Congress considers authorities to further code these risks,” the authoritative detailed.

What bash you deliberation astir SEC Chair Gensler’s warning? Let america cognize successful the comments conception below.