US Securities and Exchange Commission (SEC) Chairman Gary Gensler has warned that most crypto tokens will fail. He has urged investors not to “get stuck in FOMO, the fear of missing out,” emphasizing that cryptocurrencies are a highly speculative non-compliant asset class.
Gary Gensler expects most cryptocurrencies to fail
SEC Chairman Gary Gensler gave some cryptocurrency investing advice Wednesday during a Twitter space discussion hosted by the US Military.
Calling cryptocurrencies a “highly speculative and volatile asset class,” Gensler stressed that most cryptocurrencies “do not comply with securities laws, but they should.” Noting that cryptocurrencies are “the Wild West”, he also questioned the use cases of most tokens.
The SEC chief warned:
Most of these 10,000 or 15,000 tokens will fail.
“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.” explained.
Emphasizing that cryptocurrencies are “not generally compliant,” Gensler proceeded to advise investors:
Don’t get sucked into FOMO, the fear of missing out. Please don’t get sucked into it.
This was not the first time Gensler had warned about crypto tokens failing. In May of last year, following the collapse of the terra/luna ecosystem, he similarly warned that many crypto tokens would fail.
The SEC chief has been criticized by lawmakers and industry participants for taking an enforcement-focused approach to regulating the crypto industry. In November of last year, Gensler stated that the securities regulator’s compliance division will remain focused on cryptocurrencies.
This week, the SEC charged two prominent crypto firms, 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 think about SEC Chairman Gary Gensler’s crypto warning and advice? Let us know in the comments section.
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