SEC Chairman Gary Gensler recently stated that the organization will use its executive power to regulate cryptocurrencies. He issued warnings for DeFi altcoin projects such as Terra UST and Celsius CEL, which pay 4-20% annual interest.
Gary Gensler: The reason for the losses is that many platforms are not yet regulated
According to Gensler, when it comes to exchanges, crypto lending platforms and brokerages, individuals will benefit from investor protection. SEC Chairman says stablecoins are used as native tokens on exchanges. Gensler also once again compared stablecoins to gambling. Dollar-backed cryptocurrencies need to be defended against fraud and manipulation. Apart from these, Gensler stated that the SEC will use its executive power to make regulations:
It may be appropriate for Congress to weigh in to ensure financial stability.
“These altcoin projects are traps”
Terra UST and Celsius are the largest Defi platforms offering double-digit interest yields. Gensler says these rates will cause problems in the future because they are excessive.
When asked about his previous remarks that the vast majority of cryptocurrencies are unregistered securities, Gensler replied that “if you are raising money from the public and the public is expecting earnings based on the efforts of this joint business, it is a security.”
In his statements in the past hours, the SEC Chairman said that the institution closely monitors all altcoin projects. Bitcoin is not a security by the standards of the SEC. However, the institution is scrutinizing the stablecoin and other altcoin sectors.
According to Gensler, asset-backed securities and stock offerings are different. Therefore, the decisions of the regulators will vary according to the conditions of the period. The SEC chief also invited business leaders once again to visit the agency’s offices and speak with regulators. Speaking about the current problem in the cryptocurrency loan market, Gensler warned investors not to rely on excessive profits offered by some platforms. The statements of the SEC Chairman on this subject were as follows:
If it’s too good to be true, there may be too much risk out there.
On Wednesday, troubled crypto lending platform Celsius officially declared bankruptcy. After that, “#CELShortSqueeze” started trending on social media. We covered the details in this article.
Gary Gensler likens stablecoins to poker chips
After Terra, the main agenda of regulators focused on stablecoin projects. Gensler, in his previous statements, emphasized that stablecoins need more comprehensive regulations. Gensler’s final words on stablecoins were:
Poker is played with all of them. But you can’t go to Starbucks and get coffee.
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