Cryptured.com_ The US Securities and Exchange Commission’s (SEC) chairman, Gary Gensler, has expressed worry about the frequency of fraud in the cryptocurrency industry.
Gensler claimed that the cryptocurrency sector is “rife with fraud and hucksters” in an interview with Bloomberg on Thursday. While there are also good performers, he continued, there are “far too many” terrible actors.
He emphasised during the interview that there are other obstacles that investors must overcome in addition to the industry’s speculative nature.
Despite the fact that many cryptocurrencies are subject to securities regulations, he asserted that investors shouldn’t believe they will be protected by these rules.
“US investors are not receiving complete, equitable, and honest disclosures. Furthermore, the platforms and middlemen are acting in ways that we would never approve of or anticipate the New York Stock Exchange or Nasdaq doing.
The SEC Chair emphasised that cryptocurrency platforms do not adhere to regulations that shield users from fraud.
In this industry, there is a lot of noncompliance. The platforms themselves, where trading of different crypto currencies takes place, are not always consistent with those tried-and-true safeguards against fraud and manipulation.
Gensler’s remarks follow a US court decision in favour of Ripple in the current SEC action, according to which the act of selling XRP on exchanges does not in and of itself constitute an investment contract.
The Southern District of New York District Court ruled that the “offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts.”
Gensler earlier expressed disappointment with the choice, saying that the commission is “still looking at it and assessing that opinion.”
After the FTX collapse, the SEC intensified its examination of cryptocurrencies.
Following the recent failure of a few well-known crypto startups, the SEC has increased its monitoring of cryptocurrency companies.
The largest cryptocurrency exchange in the world, Binance, as well as the biggest exchange operating in the US, Coinbase, were both sued by the commission last month.
In the meantime, growing regulatory scrutiny has compelled cryptocurrency businesses to think about moving to nations with better regulatory environments.
In Bermuda, Coinbase is already well established, and it might open an international exchange there as well.
Additionally, Gemini is thinking about moving to the United Arab Emirates, while Bittrex, which was once situated in Seattle, has stopped operating in the US.
The percentage of blockchain developers based in the US has been decreasing over the past five years, according to April research by Electric Capital.
This reduction, from 40% in 2017 to 29% in 2020, raises the possibility that regulatory ambiguity in the US is pushing away cryptocurrency.
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