SEC's Gary Gensler warns a lot of people are 'likely to get hurt' without crypto rules like those for bank deposits, insurance
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- Gary Gensler warned that crypto investors are "likely to get hurt" if the digital asset space does not have rules in place.
- The SEC chair also said crypto platforms that ask users to invest money for returns will be regulated.
- His comments came after Coinbase abandoned its plans for Lend, its crypto lending program.
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US Securities and Exchange Commission Chair Gary Gensler warned that cryptocurrency investors are "likely to get hurt" if the digital asset space does not have the same kind of protection against fraud and manipulation that certain traditional banking instruments have.
"This crypto space is now certainly of a size that without those investor protections of banking, insurance [and] securities laws [and] market oversight, I do think somebody is going to get hurt," Gensler said during the Financial Times' Future of Asset Management North America conference. "A lot of people are likely to get hurt."
The SEC chief also said crypto platforms that ask users to invest money for returns will be regulated. As such, they "should consider the securities laws carefully and talk to the agency about getting registered."
If they have not registered in the past - as they should have - Gensler said they should do so now.
His comments came after Coinbase Global on September 20 announced it was abandoning plans for Lend, its crypto lending program that drew the ire of the SEC. Announced in June, Lend would've allowed customers to earn 4% interest on their cryptocurrency holdings by lending tokens.
The decision to ditch the Lend program was revealed after Gensler hardened his stance against crypto exchanges. The SEC had also warned Coinbase it was planning to take enforcement action, saying its Lend product was considered a security.
Still, Coinbase has other plans to further integrate digital assets into the realm of traditional banking. On Monday, the company unveiled a new feature that will allow users to deposit their paychecks directly into their accounts on the cryptocurrency exchange.
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