The SEC commissioner questions the lack of protection for cryptocurrency investors

ChainCatcher news, according to FinanceFeeds, SEC Commissioner Caroline A. Crenshaw expressed serious concerns about the lack of basic protections for retail investors at the latest cryptocurrency working group roundtable. She pointed out that most crypto trading platforms are not registered with any regulatory agency, and they integrate brokerage, clearing, and custody functions within a single entity, which sharply contrasts with the traditional financial markets' practice of separating these functions to avoid conflicts of interest.

Crenshaw emphasized that there is a significant disconnect between investors' expectations for the protection of their crypto assets and the reality—many are unaware that in the event of an exchange bankruptcy, crypto assets are considered the property of the exchange, and they do not know that these investments are not protected by FDIC or SIPC insurance.