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

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has warned the public about crypto investments that seem “too good to be true.” Meanwhile, the U.S. Treasury Department says that the recent crypto market turmoil underscores the urgent need for regulatory frameworks that mitigate the risks posed by digital assets.

SEC Chair Gensler’s Crypto Warning

Last week, Gary Gensler (SEC Chairman) warned investors against crypto-lending platforms promising products that are too good to true.

The securities regulator’s warning followed crypto lender Celsius Network’s withdrawal freeze early last week.

“We’ve seen again that lending platforms are operating a little like banks. They’re saying to investors ‘Give us your crypto. We’ll give you a big return 7% or 4.5% return,’” Gensler was quoted as saying. “How does somebody offer (such large percentage of returns) in the market today and not give a lot of disclosure?”

SEC chair:

Public beware. It may be impossible to believe if it sounds too good to true.

The SEC and several state securities regulators are currently investigating Celsius Network’s decision to freeze withdrawals. According to reports, the company subsequently hired Citigroup as an advisor and sought help from Akin Gump Strauss Hauer & Feld, a law firm that specializes in financial restructuring.

Babel Finance, a Hong Kong company that deals in crypto products, temporarily stopped withdrawals and redemptions following Celsius.

Treasury Official Underlines the Urgent Need For Crypto-Regulatory Frameworks

In early May, cryptocurrency terra and stablecoin Terrausd collapsed. Also, troubles with crypto lending platforms shaken crypto markets.

Bitcoin dropped below $20K this weekend, marking the first drop in value since 2020. The overall cryptocurrency market lost over $1 Trillion dollars since April.

An official from the U.S. Treasury Department stressed the need to regulate cryptocurrency last week, following the collapse of the crypto markets. Nothing that the Treasury Department is “monitoring activity in the crypto market,” the official told Reuters:

Recent turmoil is a reminder of the urgency for regulation to reduce the risk posed digital assets.

“We continue to work closely with our regulatory partners, as they take action under their existing authorities, and offer guidance and expertise as Congress considers legislation to further address these risks,” the official detailed.

What do you think about SEC Chair Gensler’s warning? Comment below.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.