The Chairman of the United States Securities and Exchange Commission (SEC) – Gary Gensler – said that the turmoil in the digital asset market has not ended with the Terra fiasco. He predicted that many more coins will “fail,” which will hurt more investors.
The storm is not over yet
The cryptocurrency market has declined significantly over the past few weeks. Bitcoin, for one, is down more than 25% in the past 14 days. However, all eyes were on Terra’s native token, LUNA, which fell from nearly $80 to less than a cent in a matter of days. The project’s UST algorithmic stablecoin has lost its peg against the US dollar and is currently trading at $0.08, which many believe was the initial source of the aforementioned crisis.
According to to SEC Chairman – Gary Gensler – crypto traders should be prepared to see other coins fail to near zero. Thus, they could lose their funds, while their confidence in the digital asset industry will be shaken:
“I think a lot of these tokens will fail. I fear that in crypto… there are a lot of people hurt.
Additionally, Gensler reiterated the SEC’s plans to place crypto platforms under strict scrutiny. The agency insists that all trading platforms be registered with the financial watchdog. It can be assumed that in this way investors will have maximum protection when dealing with cryptocurrencies:
“They should move towards the recording or, you know, we’re going to be the cop on the spot, and we’re going to take the enforcement action.”
SEC hires more people to bolster its crypto unit
Earlier this month, the top US currency regulator pledged to nearly double the size of its Crypto Asset and Cyber Unit. It will be supplemented by 20 experts, and the total number will increase to 50. Additional positions include lawyers, fraud analysts, supervisors and attorneys.
The main reason for such an expansion is to provide additional protection to investors. Gensler commented at the time:
“By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in crypto markets while continuing to identify cybersecurity disclosure and oversight issues.”
The agency pointed out that this division has resolved more than 80 enforcement cases involving fraudulent cryptocurrency activity to date. These scams have ripped off more than $2 billion from investors.
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