Gary Gensler: Crypto investors need greater protection

Because of the speculative nature of cryptocurrencies, investors need greater protection, or they risk losing trust in the markets. The remark came from the head of the SEC Gary Gensler, according to Reuters.

As a rule, buyers of cryptocurrencies do not receive the same amount of information as is typical for other asset classes, the official said. For example, this concerns the trading platforms used or whether users really own their funds in their digital wallets, added Gensler.

"There is a fundamental deal: investors may choose the level of risk they are willing to take, but disclosure must be full and fair. People should not lie to you," said Gensler at the annual conference of financial regulators in Washington.

According to him, cryptocurrency markets are regarded as decentralised, but in reality most activity occurs on a handful of large trading venues. Alongside token issuers, they should interact with the CFTC to shore up industry rules and inform consumers, Gensler said.

Regarding crypto platforms, he reminded about the need to observe basic market principles, such as "fighting fraud, countering manipulation and insider practices, and ensuring a real, not fictional, order book".

Gensler noted that the SEC will continue to cooperate with the CFTC to broaden oversight of all types of cryptocurrencies.

"There is a lot to be done here, and investors are not adequately protected yet," he concluded.

In May, the regulator created 20 additional positions for its Crypto Assets and Cyber Unit.

Commissioner Hester Peirce criticised the agency’s decision.