John McCrank

(Reuters) – Cryptocurrency assets can be highly speculative and therefore investors need to have more protections, Gary Gensler of the U.S. Securities and Exchange Commission stated on Monday.

Gensler explained that most people who purchase cryptocurrencies don’t get the same disclosures as those who make other asset acquisitions. These disclosures include whether or not the trading platform is trading against them and whether or not they own any assets stored in digital wallets.

At the Financial Industry Regulatory Authority’s annual conference, he stated that there was a basic agreement: The investing public has the right to make their own decisions about how much risk they take. However, full disclosure is required and no one should lie to them.

He made these comments after the dramatic collapse last week of TerraUSD, a “stablecoin” that has lost its 1-to-1 dollars peg.

The crash of the token sent cryptocurrency tumbling. A slide that was resumed Monday as bitcoin lost the gains it made over the weekend to trade below $30,000 and far lower than its Nov. 10, record of $69,000.

Crypto markets can be viewed as being decentralized. However, there is a lot of activity on only a small number of platforms. Gensler explained that token issuers need to cooperate with the SEC for better industry rules and disclosures.

He highlighted basic market principles such as “antifraud, antimanipulation”, making it clear that there wasn’t front running, making sure the order books are real and not fake.

Gensler explained that while the SEC will still be “an officer on the beat,” Gensler also stated that they are working together with the Commodity Futures Trading Commission (CFTC) to make sure all cryptocurrency is covered.

He said, “There is a lot of work to be done and at the moment the investors public does not have the best protection.”