Investments in cryptocurrency assets should be treated like buying lottery tickets, which can be expected to both win and lose. That’s what CFTC Commissioner Caroline Pham told CNBC.
She said the creators of many cryptocurrency projects don’t disclose detailed information to investors who buy assets with the expectation of “guaranteed profits.”
You can get rich, or you can lose all your money, Pham said.
The CFTC commissioner mentioned the collapse of the Terra ecosystem. She called the incident a tragedy for the whole market and a test of its strength, noting that the collapse of the TerraUSD (UST) algorithmic stackcoin once again proves the resurgence of “shadow” banking.
Pham said she hopes investors will assess risks more carefully before buying such assets. In her opinion, the cryptocurrency market should be subject to traditional finance laws.
“It’s always faster to create a regulatory framework when it already exists. You’re just talking about expanding the regulatory perimeter around new, original products,” the Commission said.
Pham called for eliminating the ambiguity around “stable coins.” The commissioner added that the Terra debacle is enough to force lawmakers to “get the regulatory framework right.”