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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler announced some of the comments in his speech on Monday aimed at expanding investor protections in the cryptocurrency market. He said the agency plans to register and regulate cryptocurrency exchanges to minimize risks for investors. Unlike traditional banks and investment platforms, cryptocurrency exchanges now often manage clients' assets. This can increase the likelihood of being at risk with large-scale hacks. Last year, fraudsters and hackers stole $14 billion in cryptocurrencies.
He also announced that the SEC will work with the Commodity Futures Trading Commission to address cryptocurrency-based security token trading platforms and commodity tokens.
At the Penn Law Capital Markets Association's annual conference he said: "There is no reason to differentiate the cryptocurrency market just because they use different technologies. Government protections for traditional asset investors should also apply to individual cryptocurrency market investors."
Gensler's comments come nearly a month after President Joe Biden signed an executive order urging federal agencies to consider the potential risks and benefits of cryptocurrencies. Biden's move has emboldened experts, many of whom interpret it as a sign that the federal government is increasingly recognizing the cryptocurrency industry as legal here.
What the new rules mean for investors
With the new oversight and regulation of cryptocurrencies, many investors are very welcome about this change, but there is a small part of them who are not satisfied about this. Many experts say that if there are many regulations will increase market stability as well as the price and value of cryptocurrencies. Help prevent more fraudulent activity in the cryptocurrency ecosystem and provide clear guidance to enable companies to innovate in this digital currency economy.
Based on Gensler's comments, while investors shouldn't make any changes right away, it's a good reminder that many new regulations will be changed.
In terms of cryptocurrency investing, the fundamentals remain the same. Experts say that investors should invest with two popular cryptocurrencies, Bitcoin and Ethereum. They have a solid, low-risk foundation even if they still fluctuate sharply according to the current price and date and time.
The experts added: "You should also make sure that cryptocurrency investments do not interfere with other financial problems such as saving for emergencies, paying off high-interest debt, savings, retirement. Make sure you don't invest more than you can lose or less than 5% of your total portfolio."
