tl;dr
With at least 11 Bitcoin ETFs pending approval by the U.S. Securities and Exchange Commission, agency chair Gary Gensler warned investors about investing in cryptocurrency. Gensler highlighted the potential lack of compliance with federal securities laws and the risks associated with cryptocurrencie...
With at least 11 Bitcoin ETFs pending approval by the U.S. Securities and Exchange Commission, agency chair Gary Gensler warned investors about investing in cryptocurrency. Gensler highlighted the potential lack of compliance with federal securities laws and the risks associated with cryptocurrencies, including major platforms and crypto assets becoming insolvent or losing value. He also pointed to over $1.7 billion in cryptocurrency stolen in 2023 and highlighted various scams targeting cryptocurrency investors, including pyramid and Ponzi schemes. Despite Gensler's warnings, many in the cryptocurrency community viewed his comments as a backhanded capitulation.
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But while the Bitcoin ETFs appear to be poised for approval, Gensler said cryptocurrency is still a risky bet. He called the cryptocurrency market rife with ‘hucksters, fraudsters, and scam artists.’ Gensler pointed to scams targeting crypto investors including pyramid and Ponzi schemes, and theft targeting wallets. A December 2023 report by blockchain intelligence company TRM Labs said that over $1.7 billion in cryptocurrency had been stolen that year. The $1.7 billion, however, is still less than half the $4 billion stolen in 2022. Despite Gensler's warnings, many in the cryptocurrency community viewed his comments as a backhanded capitulation.
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While Gensler’s comment had the hallmarks of an SEC investor alert, many on Crypto Twitter took the time of the thread as a backhanded capitulation. “This is what capitulation looks like, folks,” Autism Capital, a pseudonymous crypto market commentator, said in reply to Gensler’s comments. “I don’t want your crypto advice Gary,” content creator and podcaster Gabriel Haines tweeted. “It’s over, Gary Gensler lost!” a cheerful OSF said on the Rug Radio Fomo Hour after the tweet came out. “This is the beginning of everything!"
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