Switzerland's top market regulators said on Wednesday that cryptocurrencies trading increasingly resemble the US stock market of the late 1920s, and that regulators should take more action to protect consumers from abuse in the freewheeling sector.
The $890 billion market is currently only covered by patchy regulation, but governments are trying to figure out how to oversee it.
The US securities watchdogs warn of the potential manipulation of opaquecoin markets, and regulators and policymakers have fretted for a long time about the risk to consumers from cryptocurrencies.
"There is a lot of work to be done," said Urban Angehrn, CEO, Swiss Financial Market Supervisory Authority FINMA. "It would seem to me that a lot of trading in digital assets looks like the US stock market in 1928, where all kinds of abuse, pump and dump are now in fact common," he said at a conference in Zurich.
It's important to think about the potential of technology to make it easy to deal with large amounts of data and to protect consumers from trading on abusive markets, Angehrn said.
The past few weeks, the markets ofcryptocurrencies have been in turmoil because of the blow-ups at several major companies.
The overall market for cryptocurrencies fell to around $900 billion, down from a record $3 trillion in November, with losses mounting after U.S. criptocurrency lender Celsius Network froze accounts of its 1.7 million customers.
The largest criptome fell below $20,000 for the first time since December 2020. It has plummeted around 60% this year, as rising inflation and rising interest rates prompt a flight from stocks and other higher-risk assets.
The troubles at Celsius are likely to increase the U.S. regulatory pressure on a sector already on the defensive amid other crises this year.