Former top manager SEC: "Cryptocurrencies will never become a financial panacea" – Bits Media

Former employee of the SEC law enforcement department John Read Stark (John Reed Stark) He called several reasons, because of which, In his opinion, cryptocurrencies fail as an asset for investment.

Stark agreed, what, Having worked in the US Securities and Exchange Commission (SEC) more 18 years old, He still often criticizes the actions of the department. And yet he thinks, that cryptocurrencies are not suitable for investment due to the lack of transparency, proper supervision of the industry, consumer protection, insurance, licensing and requirements for pure capital. According to Stark, Investors initially have no chances in the cryptocurrency market, since it is replete with manipulators, scammers and insiders.

As the former top manager SEC put it, Cryptocurrencies will not be able to function as currencies due to the variability of their course and high commissions. It will be difficult for cryptocurrencies to become a means of payment, Since their course may fall on any day, Stark argues. He is convinced, that cryptocurrencies cannot be called a good means to maintain savings, Since they have no internal value, their course is based on the theory of "more fool". Previously, a similar statement was made by the host of the Mad Money show on the CNBC channel Jim Kramer (Jim Cramer).

Stark also noted the absence of state supervision and protection of the rights of injured users in the event of a malfunction of crypto platforms or hacker attacks. As for bankruptcies of traditional financial institutions, In this case, the government intervenes, To take measures to help depositors. Stark noted, what if securities are stored in a brokerage company, registered in SEC, They are separated from the assets of this broker. It means, that customer assets are “under the wing” of the corporation to protect investors in securities (SIPC), created by the US Congress in 1970 year. SIPC insures customer securities and money on brokerage accounts for the amount before $500 000, Stark explained.

“Cryptocurrencies will not become a financial panacea for those, who has no bank accounts, Because digital assets are akin to predatory fraud, to deceive the deprived and dissatisfied citizens. Cryptic generation spreads, Cryptotites become fugitives, informants and defendants, and fiat currencies disappear ", - concluded Stark.

Last year, a former SEC employee suggested, that bitcoin can be unregistered security, Despite its decentralization and lack of control by a single body.