SEC Chairman Gary Gensler Warns Crypto Investors Must Be Ready To Lose 100 Percent Of Assets If Not Be Careful

Chairman of the US Securities and Exchange Commission, Gary Gensler. (Photo; Doc. Soyhodler)

JAKARTA - The crypto industry received the spotlight from the Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler. In an interview with CoinDesk, Gensler expressed concern regarding fraud and bankruptcy that is rife in the crypto space.

Gensler says crypto investors don't get enough information about the projects they invest in. He also doubts the value of some digital assets that are considered securities.

"If there are goods or services, we can understand them, but what is the actual value proposition of having decentralized tokens?" he asked.

According to Gensler, many crypto projects are only speculative, including Bitcoin (BTC), which is a commodity. He warned that crypto investors should be careful and do research before investing because they can lose all their money.

"Investors have to be vigilant, they have to be careful, they have to be ready to lose 100 percent of their assets - if you can find a website, if you can read about them in CoinDesk, you might be betting on those entrepreneurs," Gensler said.

SEC Identification Of Wash Trading In Crypto Companies

Gensler also highlighted the problem of misuse of user funds by several crypto companies. He said the SEC was concerned about companies mixing user funds with operational funds. The SEC has sued several crypto companies, including the bankrupt FTX exchange, for the allegation.

In addition, Gensler said that some crypto companies engage in practice of wash trading and trading against their customers to take advantage. Wash trading is a practice of buying and selling assets with the aim of creating fake market activity.

Gensler revealed that the SEC is reviewing regulations that could affect the crypto industry. He said that the SEC wants to protect investors and prevent illegal activities in the crypto space. However, until now, the SEC has not issued any rules to regulate the crypto industry.

The SEC is only taking law enforcement action against industry players suspected of violating the rules. The SEC has filed a lawsuit against Coinbase, Binance, Kraken, and Gemini on suspicion of operating in the US without proper registration.