SEC's Gary Gensler warns a lot of people are 'likely to get hurt' without crypto rules like those for bank deposits, insurance

In April, Gary Gensler was elected chair of the SEC. Alex Wong/Getty Images
Gary Gensler warned crypto investors that they are likely to be hurt if there are no rules for the digital asset space.

SEC Chair also stated that crypto platforms asking users to invest in return for their returns will be regulated.

He made these comments after Coinbase had abandoned plans for Lend, their crypto lending program.

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Gary Gensler, Chair of the US Securities and Exchange Commission, warned that cryptocurrency investors could be "likely to get injured" if the space for digital assets lacks the same protection against fraud and manipulation as traditional banking instruments.

Gensler stated that the crypto space is so large that it is likely someone will get hurt if there are no investor protections such as banking, insurance, securities laws, and market oversight. Gensler spoke at Financial Times Future of Asset Management North America conference. "A lot of people will get hurt."

SEC chief said that crypto platforms asking users to invest in return will be regulated. They should therefore carefully review the securities laws and speak to the agency about becoming registered.

Gensler advised that they register if they haven't done so in the past, as they should.

He made these comments after Coinbase Global announced on September 20 that it would no longer be offering Lend, its crypto lending program which drew the ire from the SEC. Lend, which was announced in June, would have allowed customers to earn 4% interest by lending tokens.

Gensler had redoubled his opposition to crypto exchanges and led to the decision to end the Lend program. Coinbase was also warned by the SEC that it planned to enforce its Lend program, claiming that it was a security.

Coinbase still has plans to integrate digital assets in traditional banking. The company announced Monday a new feature which will allow users deposit their paychecks directly to their accounts on the cryptocurrency exchange.