U.S. SEC Chairman: There are three ways to determine whether a cryptocurrency project is suspected of fraud

ChainCatcher News, SEC Chairman Gary Gensler outlined three ways to determine whether a crypto project may be fraudulent during a Twitter Space event: (1) The crypto project cannot provide clear documentation about how it works or how it plans to achieve its goals; (2) The project cannot prove its compliance; (3) The project cannot easily explain what it is.

Additionally, Gary Gensler stated that offering high returns is another red flag, as some fraudulent projects are overly complex or may rush investors into making decisions, leading to "fear of missing out." Gary Gensler reiterated that cryptocurrencies may be unregistered securities that do not comply with U.S. securities laws, but did not mention FTX. (Decrypt)