ZURICH: Cryptocurrency trading is increasingly resembling the US stock market of the late 1920s, Switzerland’s top market regulator said on Wednesday, calling on regulators to take more action to protect consumers from abuse in freewheeling sector.
Governments are trying to figure out how best to oversee the $890 billion crypto market, which is currently covered only by uneven regulation.
Regulators and policymakers have long worried about the risk cryptocurrencies pose to consumers, with U.S. securities regulators among those warning of the potential manipulation of opaque crypto markets.
“There is a lot more to do,” said Urban Angehrn, CEO of the Swiss Financial Market Supervisory Authority (FINMA).
“It would seem to me that a lot of digital asset trading resembles the US stock market of 1928, where all sorts of abuse, pumping and dumping, are now in fact commonplace frequently,” Angehrn told a talk at Zürich.
“Let’s also think about the technology’s potential to facilitate the processing of large amounts of data and to protect consumers from trading in abusive markets,” Angehrn said.
Crypto markets have been in turmoil over the past few weeks after blowouts at several major companies.
The overall crypto market has crashed to around $900 billion from a record high of $3 trillion in November, with losses mounting after US crypto lender Celsius Network last week froze the accounts of its 1 .7 million customers.
Bitcoin, the largest cryptocurrency, fell below $20,000 on June 18 for the first time since December 2020. It has fallen around 60% this year, under pressure as inflation surges and rising interest rates prompt people to flee from equities and other higher risks. assets.
Celsius’s troubles are expected to increase US regulatory pressure on a sector already on the defensive amid other crises this year.