Speaking about the BRL 158 million fine on the Kraken brokerage, Gary Gensler quoted a famous slogan used by the cryptocurrency community this Friday (10), which serves as a warning to third-party trust.
“There is a saying in crypto that says “the keys are not yours, the cryptocurrencies are not yours”, so other platforms should take note of this”warned the chairman of the US Securities and Exchange Commission, the SEC.
In English, the slogan “not your keys, not your coins” is some of the wisest advice out there. After all, Bitcoin was created precisely so that people do not have to depend on third parties to manage their finances, but unfortunately many still make this mistake.
SEC Chairman Warns Entire Industry After Fining Cryptocurrency Giant
Speaking to CNBC this Friday (10), Gary Gensler commented on the SEC’s millionaire fine to Kraken brokerage, an event that pushed Bitcoin’s price below $22,000 after its biggest daily drop in 2023.
The Chairman of the SEC explains and notes the decision “What Kraken asked Americans about their cryptocurrencies and said ‘I’ll give you a return, 4% to 21%’ and the problem is they didn’t disclose the risk to the investor.”
Moving on, Gensler points out that Americans are free to take any risk they want, but companies have an obligation to fully, honestly and truthfully explain risk.
However, what stood out in the interview was the following sentence, in which the chairman of the SEC used a famous community catchphrase to warn investors not to trust third parties.
“If someone takes your tokens and transfers them to a platform, where the platform controls them, guess what happens if they go bankrupt? You get in line at the bankruptcy court. There is a saying in crypto that says “the keys are not yours, the cryptocurrencies are not yours” so other platforms should take note.
In other words, people risk all their savings in exchange for a promise of profit, which often ends badly. A story that illustrates this is the bankruptcy of Celius, where a judge ruled that the cryptocurrencies did not belong to the investors, but to the company.
The same goes for leaving your coins in exchange, as if they were wallets. That is, you don’t even know if these cryptocurrencies exist. All you need to do is make a promise that your withdrawal will be processed.
Bitcoin works in the fall after SEC decision
With the US mounting pressure on the cryptocurrency market, Bitcoin this Thursday presented its biggest daily drop of 2023 (9), driving other cryptocurrencies downhill.
When asked about various methods Americans can use to get around the SEC’s decision, such as using a VPN, Gary Gensler again said he is committed to investor safety.
“We are technology neutral at the SEC, we are focused on protecting investors.”
Kraken knew how to have a record, different [empresas] it is also just a form on our website”Gensler said. “If they want to offer staking, we are neutral, come and register, but investors need to know what you are doing with these tokens. Are you trading? Take out loans? Are you using it for your own benefit? We’ve seen this in the cryptocurrency world, so investors not only need it, but it’s the law.”
Finally, regulators seem much more concerned about the bankruptcy of FTX, then the second largest exchange in the world. Therefore, Gensler’s rules seem coherent to prevent more losses, especially for more naive users.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
