Crypto is Speculative, and Users Need Protection: US SEC
As the crypto market is facing a crisis, many have turned in to offer their solutions to avoid such situations in the future. The United States Security and Exchange Commission suggested in a recent interview that the market should consider regulatory measures if they intend to keep its trust intact.
The recent fiasco of TerraUSD has left the market shaken as even the crypto king is surfing in the red zone currently. The stablecoin, which is supposed to be protected by the algorithm, fell to the depths, pushing LUNA towards $0.
The fall, however, was not limited to the Terra ecosystem alone, as the entire market’s TVL lost more than $100 billion. Terra’s $30 billion TVL was about 99% and came down to $300 million. On the other hand, Bitcoin, which gained a bit during the weekend, resumed the downhill slide on Monday and is currently trading well below $30,000. It is a big blow to the investors, given BTC was soaring above $60,000 just a few months back.
Following this market fall, Gary Gensler from the Securities and Exchange Commission of the United States stated that cryptocurrencies are highly speculative. There are not enough measures taken to safeguard investors from volatility or manipulation.
He added that cryptocurrency purchases do not come with full disclosure as regulated markets do. So, the buyers cannot know whether they own the assets or the platform is just trading against them. Gesler discussed these aspects during the annual conference of the Financial Industry Regulatory Authority held in Washington.
The interview also emphasized that the crypto market is run by a handful of platforms and issuers, despite claiming to be decentralized. According to Gesler, these platforms can work with SEC to formulate rules and disclosures to improve the Industry’s current outlook.
It would help the investors ensure that there is a real set of rules behind all the operations. Moreover, there will be a substantial front against fraud, manipulation, and other illegal activities that might find their way into the market.
Gesler promised that the SEC would keep working toward regulating the crypto sector. However, he also emphasized that until something is done, investors will remain unprotected.
Only recently, Vitalik Buterin from Ethereum also emphasized that the sector needs to bring measures to protect smallholders. Although he did not go into implementing regulations, he referred to the Singaporean employment law to take on a structured approach in the crypto space.
