CFTC commissioner compares cryptocurrencies to lottery tickets

Investing in crypto assets should be treated like buying lottery tickets, which can be expected to win or lose. CFTC Commissioner Caroline Pham said this in an interview with CNBC.

According to her, the creators of many cryptocurrency projects do not disclose detailed information to investors who buy assets based on “guaranteed profits”.

“You can get rich, or you can lose all your funds,” said Pham.

The CFTC commissioner mentioned the collapse of the Terra ecosystem. She called the incident a tragedy for the entire market and its test of strength, noting that the collapse of the algorithmic stablecoin TerraUSD (UST) once again proves the revival of “shadow” banking.

Pham expressed her hope that investors will carefully assess the risks before buying such assets. In her opinion, the laws on traditional finance should apply to the cryptocurrency market.

“It’s always faster to create a regulatory framework when it already exists. You are just talking about expanding the regulatory perimeter around new, original products,” said the representative of the Commission.

Pham called for the elimination of ambiguity around “stablecoins”. The commissioner added that Terra’s collapse is enough to force lawmakers to “adopt the right” regulatory framework.

In January, the interim head of the Office of the Comptroller of the Currency (OCC) within the US Treasury, Michael Hsu, allowed a situation of “banking panic” among holders of stablecoins.

Later, the head of the OCC announced the need to equate issuers of “stable coins” with depository institutions with mandatory deposit insurance.

Recall that in May, Hsu confirmed the correctness of the “careful and cautious” approach of the regulator to cryptocurrencies. According to him, the decline in market capitalization after the collapse of Terra did not lead to “infection of traditional banking and finance.”

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