Forex in this article
• SEC chief Gensler warns against promises of excessive returns on the cryptocurrency market
• Investors should be skeptical
• The Celsius measure to freeze client funds is likely a cause for warning
US Securities and Exchange Commission (SEC) Head Gary Gensler advises investors in the cryptocurrency market not to believe unfiltered yield promises, especially from cryptocurrency lending platforms, according to a report from Reuters news agency. .
“Too good to be true”
“We have seen once again that lending platforms work a bit like banks. They tell investors, ‘Give us your cryptocurrency. We will give you a great 7% or 4.5% return in return.’ How can anyone offer (such a high percentage of returns) on the market today and not reveal much about it? ” Reuters quoted Gensler as said during an industry event.
Specifically, Gensler would refer to the developments surrounding the Celsius Network crypto lending service. The company had suspended all payments, swaps and transfers between accounts following a massive withdrawal of client funds and the collapse of the cryptocurrency market, freezing client assets. Celsius offers interest-bearing products to customers who deposit cryptocurrencies on its platform. So lend cryptocurrencies to earn a return. It should be possible to achieve yields of up to 17 percent, according to Celsius’ customer promise.
For Gensler, promises of returns of this magnitude are obviously a reason to pay attention and become skeptical. “I warn the public that if it sounds too good to be true, it may be too good to be true,” the SEC chief said.
Cryptocurrency expert Gensler pushes for market regulation
Since Gary Gensler, considered a cryptocurrency expert, took the top spot, the US SEC has stepped up its efforts to regulate the cryptocurrency market. The SEC’s work specifically focuses on investor protection.
Apparently, cryptocurrency lending platforms are particularly targeted by the supervisor. In February, the SEC fined the BlockFi cryptocurrency lending platform a record $ 100 million.
Financeen.net editorial staff
Image sources: Chinnapong / Shutterstock.com, Andrew Harnik / AP