Investor protection rules should apply to cryptocurrency exchanges as the platforms do not have rules that prevent fraud and promote fairness, The Wall Street Journal reports, citing US Securities and Exchange Commission Chairman, Gary Gensler.
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The SEC head emphasized that the United States needs a "federal regime" where cryptocurrency exchanges are registered and regulated.
"Crypto assets are largely traded on exchanges, and the public should have investor protection regimes around them. We need a federal regime where they are registered and regulated," he said.
At the same time, Dan Berkovitz, a Commissioner on the Commodity Futures Trading Commission, warns a lot more money is being put into the market without any regulation. He also sees the rapid expansion of a "shadow financial system."
"I see a concern about whether we have a shadow financial system developing, and that should be a question for all of the regulators," Berkovitz said.
Last June, the SEC warned investors about the risks associated with investing in bitcoin (EXANTE: Bitcoin) futures. Particularly, the SEC listed a number of issues investors should consider before making a decision to invest in funds that buy or sell the cryptocurrency, an investment that the regulator claims is highly speculative.
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