The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, warned the public that most cryptocurrencies will fail and urged investors not to get carried away by the so-called FOMO (Fear Of Missing Out), stressing that cryptocurrencies are an extremely speculative and non-compliant asset class.
Calling cryptocurrencies a “highly speculative, volatile asset class”, Gensler pointed out that most “don’t comply with securities laws, but they should.”
He described the cryptocurrency space as “the Wild West” and questioned how useful most coins or tokens are.
The SEC chief warned that most of the 10,000 or 15,000 tokens will fail:
“This is because venture capital is failing, start-ups are failing, but also because our history shows that there is not enough room for microcurrencies. We have the US dollar, Europe has the euro and so on,” he explained.
Stressing that cryptocurrencies are an asset class that does not comply with regulations, Gensler gave some advice to investors:
“Don’t get carried away by FOMO, which is the fear of losing something good. Please don’t do that.”
This was not the first time Gensler warned about the failure of cryptocurrencies. In May last year, after the terra/luna ecosystem collapsed, he similarly warned that many crypto tokens would fail.
Criticisms and the securities regulator
The head of the SEC has been criticized by lawmakers and industry participants for taking an approach focused on imposing regulation on the cryptocurrency industry. In November last year, Gensler confirmed that the securities regulator’s enforcement division would remain focused on cryptocurrencies.
This week, the SEC sued two prominent cryptocurrency companies – Gemini and Genesis – for unregistered offering and selling of securities to retail investors through the “Gemini Earn” crypto asset lending program.
To summarize what Gary Gensler has said, in essence he hasn’t said anything different from what we constantly emphasize as a website.
We have repeatedly warned that at least 90% of cryptocurrencies are “junk” and have absolutely no use or value. We try to highlight the good, useful, reliable and sufficiently decentralized cryptocurrency projects that will have an important role to play in the future.
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