Securities and Exchange Commission (SEC) Chairman Gary Gensler has warned that many cryptocurrency tokens may fail. He has advised investors to be aware of FOMO, the fear of missing out, and added that it is critical to stress that digital assets are a highly speculative, non-compliant asset.
Gary Gensler Predicts Most Cryptocurrencies Will Not Survive
SEC Chairman Gary Gensler gave some cryptocurrency investment advice during a virtual chat hosted by the US Military on Wednesday.
Describing cryptocurrencies as “a highly speculative and volatile asset class,” Gensler noted that most digital currencies “do not comply with securities laws, yet should.” He also questioned the sustainability of the majority of tokens, referring to them as “the Wild West.”
The SEC chief warns:
Most of these 10,000 or 15,000 tokens won’t make it.
“That’s because venture capital fails, startups fail, but also because history tells us there’s not much room for microcurrencies, which means we have the US dollar and Europe has the euro and the like,” he explained.
Highlighting that cryptocurrencies are “generally non-compliant,” Gensler advised investors:
Don’t succumb to FOMO (fear of missing out). Don’t let yourself be drawn in.
This is not the first time Gensler has warned of the potential for crypto tokens to fail. Back in May of last year, he warned that many crypto tokens were likely to collapse following the collapse of the Terra/Luna ecosystem.
The SEC chief has been criticized by industry participants and lawmakers for his enforcement-focused approach to regulating the crypto sector. In November of last year, Gensler stated that the enforcement division of the securities regulator will continue to focus on cryptocurrencies.
This week, the SEC charged two prominent crypto companies, Gemini and Genesis, “with the unregistered offering and sale of securities to retail investors via the Gemini Earn crypto asset lending program.”
What are your thoughts on SEC Chairman Gary Gensler’s cryptocurrency warning and advice? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It does not constitute an offer to buy, sell, or a recommendation, endorsement or sponsorship of any product or service. Bitcoin.com does NOT provide advice on investment, tax, legal or accounting matters. Neither the author nor the company is liable for any loss or damage caused by or in relation to the use of this content, goods and services.