Bitcoin falls 4% after Biden nominee Gary Gensler says SEC will seek to eliminate fraud and manipulation in crypto markets

Gary Gensler
  • Bitcoin fell as much as 4% on Tuesday after SEC Chairman nominee Gary Gensler testified that he would seek to eliminate fraud and manipulation from crypto markets.
  • Gensler said that the investor protections the SEC seeks to enforce should ensure that crypto markets are “free of fraud and manipulation.”
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Bitcoin shed as much as 4% on Tuesday following Senate testimony from President Joe Biden’s nominee for Chairman of the Securities and Exchange Commission, Gary Gensler.

Gensler said that the SEC would seek to enforce investor protections in the crypto market, including ensuring that the custody of digital assets are safe and seeking to eliminate fraud and manipulation from cryptocurrency markets.

The SEC must ensure that crypto markets “are free of fraud and manipulation, and I think that’s the greater challenge, frankly, because some markets, usually operating overseas, have been rife with fraud,” Gensler said.

Bitcoin traded just below $50,000 Tuesday morning, before falling to $47,190 as of 2:15 p.m. Gensler has been viewed as an advocate for cryptocurrencies, given his past work and teachings on the subject at MIT. 

Despite the decline on Tuesday, bitcoin is still up more than 60% year-to-date.

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SEC chief Jay Clayton says he is nervously eyeing retail-driven euphoria in the stock market

FILE PHOTO: Jay Clayton, Chairman of the U.S. Securities and Exchange Commission, speaks at the Economic Club of New York luncheon in New York City, New York, U.S.,September 9, 2019. REUTERS/Shannon Stapleton
FILE PHOTO: Jay Clayton, Chairman of the U.S. Securities and Exchange Commission, speaks at the Economic Club of New York luncheon in New York City

  • Chairman of the Securities and Exchange Commission Jay Clayton told CNBC on Thursday he’s concerned about stock market euphoria stemming from retail investors. 
  •  “When stocks run away… we do get concerned because it is a situation where professional investors understand this, I do worry that retail investors do not understand that trees don’t grow to the sky,” Clayton added. 
  • His concerns come as all three major indexes hovered around record highs on Friday.
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Chairman of the Securities and Exchange Commission Jay Clayton told CNBC on Thursday he’s concerned about stock market euphoria that’s stemming from retail investors.

“We are in a situation where with mobile communications, access, and the like, there is a new paradigm. There are more retail investors participating in the market than ever before,” Clayton said.

“One thing we don’t regulate directly…is euphoria and we’re seeing some euphoria here,” he added. 

His concerns echo those of Goldman Sachs CEO David Solomon, who said earlier this week he’s also worried about retail investors driving the market to dizzying new heights. Both pointed to the hot IPO market. Airbnb, for example, leaped 115% on its first day of trading. On Friday, all three major indices hit all-time highs.

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“When stocks run away… we do get concerned because it is a situation where professional investors understand this. I do worry that retail investors do not understand that trees don’t grow to the sky,” Clayton added.

His interview comes as the SEC charged Robinhood with misleading customers on the revenue from trades resulting in a $65 million settlement, as well as a complaint from the Massachusetts securities regulator stating that the trading app encouraged inexperienced investors to execute frequent trades.  

 

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