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Financial watchdogs should do more to protect crypto investors, Swiss regulator says

Representations of the virtual currencies Ripple, Bitcoin, Etherum and Litecoin are seen on a PC motherboard in this illustrative image dated February 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

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ZURICH, June 22 (Reuters) – Cryptocurrency trading is increasingly resembling the US stock market of the late 1920s, Switzerland’s top market regulator said on Wednesday, urging regulators to take more action to protect consumers from abuse in the freewheeling sector protection.

Governments are trying to figure out how best to monitor the $890 billion crypto market, which is currently covered by patchy regulation.

Regulators and policymakers have long been concerned about the risk posed to consumers by cryptocurrencies, including U.S. securities regulators who have warned of the potential for opaque crypto markets to be manipulated.

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“There is still a lot more to do,” says Urban Angehrn, CEO of the Swiss Financial Market Supervisory Authority (FINMA).

“It seems to me that a lot of digital asset trading looks like the US stock market in 1928, where all kinds of abuse, pump and dump, is actually common today,” Angehrn said at a conference in Zurich.

“Let’s also think about the potential of the technology to make it easier to deal with the big data and protect consumers from trading in abusive markets,” Angehrn said.

Crypto markets have been in turmoil over the past few weeks following explosions at several major companies.

The overall crypto market has plummeted to around $900 billion from a record $3 trillion in November, with losses mounting after U.S. crypto lender Celsius Network froze the accounts of its 1.7 million customers last week . Continue reading

Bitcoin, the largest cryptocurrency, fell below $20,000 on June 18 for the first time since December 2020. It’s down around 60% this year and has come under pressure as rising inflation and rising interest rates prompt a flight from stocks and other riskier assets.

The troubles at Celsius are likely to increase US regulatory pressure on a sector already on the defensive amid other crises this year. Continue reading

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Reporting by Brenna Hughes Neghaiwi in Zurich, writing by Tom Wilson in London. Editing by Jane Merriman

Our standards: The Thomson Reuters Trust Principles.

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