Chairman of the U.S. Securities and Exchange Commission (SEC) Gary Gensler has warned investors to be wary of returns from crypto lending platforms that seem “too good to be true.”
He made the comments on Tuesday, a day after the world’s largest cryptocurrency dropped by 15% on Monday, its sharpest one-day fall since March 2020, as major crypto lender Celsius Network froze withdrawals and transfers on the platform and prospect of sharp U.S. interest rate rises shook the volatile asset class.
Gensler said during an industry event that crypto lending firms operate as the banks do, They say to investors ‘Give us your crypto and we’ll give you a big return 7% or 4.5% return.
He cautioned the public against such a large percentage of returns saying that If it seems too good to be true, it just may well be too good to be true.”
Focus on the crypto market was intensified again this week amid more volatility in the market that has long-alarmed watchdogs.
Featured image source: CNBC
