The SEC’s uncovering of an alleged fraudulent cryptocurrency pyramid scheme comes at a foul time for buyers, and a good worse time for the crypto industry (“SEC prices 11 in ‘huge’ crypto Ponzi scheme”, Report, August 2).
We should always notice that unhealthy actors exist throughout all industries and that fraud is just not distinctive to crypto.
Nevertheless, given the heightened scrutiny that crypto has confronted following the market’s downturn earlier this 12 months, it has by no means been extra vital for crypto to start implementing extra stringent consumer safeguards.
Failure to do that can have penalties on a consumer and regulatory degree.
From the consumer standpoint, the tons of of hundreds of thousands stolen by this pyramid scheme are surprising, however our notion of this kind of fraudulent exercise shouldn’t be primarily based on numbers alone.
Actual individuals have been led astray by the promise of massive returns and have misplaced important sums of cash, inflicting very actual ache because of this. The industry must take duty to introduce measures that can set up better transparency, training and safety.
The absence of such measures will lead to what we’ve lengthy warned the industry of: heavy-handed regulation that might probably stifle innovation.
The SEC has clearly flexed its muscle tissue, signalling to crypto that it will possibly police the industry by enforcement actions if vital.
If crypto needs to keep away from heavy-handed policing, it must act now to show the integrity wanted to regain the trust of customers and regulators alike.
Charley Cooper
Managing Director, R3
Former Chief Working Officer on the Commodity Futures Buying and selling Fee
New York, NY, US
