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SEC chairman Gary Gensler says more protection is needed for crypto investors.

Rep. Patrick McHenry has said that SEC Chairman's intentions to have more control over the crypto ecosystem will hurt America
Rep. Patrick McHenry has said that SEC Chairman’s intentions to have more control over the crypto ecosystem will hurt American innovation.

The US SEC Chairman Gary Gensler said on CNBC’s “Squawk Box” that he sees the attraction to bitcoin for traders, but regulation is required to prevent fraud and other issues. “It’s a digital, scarce store of value, but highly volatile,” Gensler said, talking about bitcoin specifically. “And there are investors that want to trade that, and trade that for its volatility, in some cases just because it is a lower correlation with other markets.”

“I think that we need greater investor protection.”

The US SEC chairman said that there is a need for greater investor protection for trading such volatile cryptocurrencies. Gensler later added that he believes bitcoin is a “speculative” store of value and that the SEC should be “technology-neutral” when it comes to innovations in markets. Bitcoin and other cryptocurrencies have witnessed massive growth since late last year, fueled by increased institutional adoption for some of the more established coins and interest from retail traders..

SEC chairman believes an authority is needed to oversee the crypto exchanges.

Gary Gensler, who previously taught classes about blockchain and other financial technology at the Massachusetts Institute of Technology, said there needed to be an authority for a regulator to oversee the crypto exchanges, similar to the equity and futures markets. He said many of the crypto coins were trading like assets and should fall under the purview of the SEC. “To the extent that something is a security, the SEC has a lot of authority. And a lot of crypto tokens — I won’t call them cryptocurrencies for this moment — are indeed securities,” the US SEC Chairman said.