United States of America. Securities and Exchange Commission (SEC) Chairman Gary Gensler tweeted a Twitter Space session where he discussed the risks of crypto investments with SEC Commissioner Carolyn Crenshaw on January 27.
Speaking to the US military, Gensler said crypto is a highly speculative and volatile investment tool. He continued that many crypto projects are unregistered securities because they fail to comply with securities laws.
The SEC chairman has repeatedly said that the commission should register many crypto projects because they qualify as securities. However, the crypto community has accused the regulator of using “regulation by enforcement” tactics.
Gensler on how to detect fraud schemes
Gary Gensler offers pointers on how investors can find out Crypto Fraud projects. According to Gensler, a scheme can be fraudulent if it fails to demonstrate regulatory compliance or fails to provide adequate information about how it operates or what it does. Other signs that a plan might be fraudulent are an inability to explain what it’s about, he said.
Other indications highlighted by the regulatory chief include schemes that offer very high and consistent returns. He advised crypto investors to think before investing and not to get caught up in fear of missing out (FOMO).
Commissioner Crenshaw reiterated Genslers warning. She said:
“The risk is high when you invest in these novel, speculative, volatile investments that lack fundamental safeguards and regulations. So, if you are considering investing in crypto, consider how much you spend in your portfolio, and certainly not more than you can lose.”
SEC Boosts Crypto Regulatory Efforts
Following the collapse of FTX in November 2022, the SEC has stepped up efforts to bring the crypto industry into compliance. The financial watchdog accused FTX’s founder Sam Bankman-Fried of defrauding investors through his trading platform.
brought the regulator fee against bankrupt lender Genesis and crypto exchange Gemini over their now-defunct Earn program. According to the regulator, the program was not registered with the commission as required by federal securities laws.
More recently, reports revealed that the SEC has increased its scrutiny of crypto companies planning to go public. Stablecoin Publishers Circle said its public listing efforts failure Because regulatory authority approval could not be obtained. Grayscale also looked at plans to replace it Bitcoin Trust in ETFs Stumbled By the Financial Controller.
BeInCrypto has reached out to the company or person involved in the story to get an official statement on the latest developments, but has yet to hear back.