Regulators want more protections for crypto investors

“Cryptocurrencies have frequently been the subject of worries by financial regulators and policymakers over the risk they pose to consumers. For almost a decade, there has been little that centralized financial regulators can do to safeguard crypto investors sold in a decentralized market. However, the recent increase in crypto frauds, scams, rug pulls, financial manipulation, and market downturns has prompted these authorities to reconsider their methods”, concludes Crystopolitan

Switzerland’s top market regulator pushed for regulators to do more to protect cryptocurrency investors from abuse in the $890 billion market that’s been plummeting for a week or so, according to a Reuters report.

The call to action is the latest move by regulators and policymakers to protect crypto investors. U.S. securities watchdogs have warned about the potential for manipulation of the markets, the report noted.

“There’s much more that can be done,” Urban Angehrn, CEO of the Swiss Financial Market Supervisory Authority (FINMA), said at a conference in Zurich. “It would seem to me that a lot of trading in digital assets looks like the U.S. stock market in 1928, where all kinds of abuse, pump and dump, are now in fact frequently common.

“Let’s also think about the potential of technology to make it easy to deal with the large amounts of data and to protect consumers from trading on abusive markets,” he said.

The overall crypto market has slumped to around $900 billion, down from a record $3 trillion in November, the report said. The decision by cryptocurrency lender Celsius to halt client withdrawals has slammed the market: prices are tumbling, and traders are preparing for further suffering as they look for hints of a repeat of last month’s Terra catastrophe. Dig a little deeper, however, and you’ll discover that the situation has the potential to be even more of an existential peril than the market analytics suggest.

Governments are trying to work out how to best oversee the $890 billion crypto market, which is currently only covered by patchy regulation.

Bitcoin, the largest cryptocurrency, fell below $20,000 on June 18 for the first time since December 2020 and has plummeted around 60% this year.

Still, the number of crypto investors jumped steeply in the year ending in April, according to PYMNTS “U.S. Crypto Consumer” report — despite crypto’s prices falling about 50% beginning in November.

The number of U.S. consumers who bought or held crypto in that period reached 23%, or nearly 60 million. That was up from 16%, or about 41.5 million, in the 2021 survey.

Regulators have been actively pushing for stricter rules in the crypto markets. The US watchdogs have warned several times about the possibility of market manipulation.

The UK’s  Financial Conduct Authority (FCA Financial Conduct Authority (FCA) has issued similar warnings regarding the same issue. Recently, the UK FCA issued another reminder to warn consumers about the risks of investing in  cryptocurrencies. In the advisory note, the watchdog raised concerns about some social media posts promoting crypto assets and non-fungible tokens (NFTs), although it clarified that comments on individual products could not be made.

The call to action is the latest move by regulators and policymakers to protect crypto investors. U.S. securities watchdogs have warned about the potential for manipulation of the markets, the report noted.