SEC Chairman Gary Gensler has cautioned investors to be careful when it comes to cryptocurrencies. He specifically advised against succumbing to “FOMO,” the fear of missing out. Gensler noted that these are very speculative and non-compliant assets.
Gary Gensler Foresees Most Crypto Tokens Failing
SEC Chairman Gary Gensler provided his thoughts on cryptocurrency investing during a Twitter Space discussion hosted by the US Military on Wednesday.
Gensler described cryptocurrencies as a “highly speculative and volatile asset class” and reminded investors that most of these tokens do not comply with securities laws. He went on to call the crypto space the “Wild West”.
The SEC chief warned:
Most of the 10,000 to 15,000 tokens may not be used, given that venture capital fails, startups fail, and history tells us there isn’t much room for microcurrencies, such as the US dollar and the euro.
He also advised investors:
Don’t get caught up in FOMO, the fear of missing out. Avoid becoming its victim.
This isn’t the first time Gensler has warned of the possibility of crypto tokens failing. Last May, he warned that many crypto tokens would collapse following the failure of the Terra/Luna ecosystem.
Gensler has been criticized by industry participants and lawmakers for his enforcement-focused approach when regulating the crypto sector. In November of last year, Gensler reaffirmed that the SEC’s compliance division would continue to focus on cryptocurrencies.
This week, the SEC charged two prominent crypto companies – Gemini and Genesis – “for the unregistered offering and sale of securities to retail investors through the Gemini Earn crypto asset lending program.”
What do you make of Gary Gensler’s warnings about crypto investing? Let us know what you think in the comments section.
Images credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is intended for informational purposes only. It does not constitute a direct or implied offer, solicitation or endorsement of any company, product, or service. Bitcoin.com does NOT provide advice on investment, tax, legal and accounting matters. Neither the author nor the company is responsible for any damage or loss that may be caused by, or in connection to, the use of, or reliance upon any content, goods and services mentioned in this piece.