The top securities regulator in Massachusetts told CNBC yesterday that the bitcoin market is âentirely speculation.â
âIt doesnât pass the smell test,â said Secretary of the Commonwealth William Galvin, whose responsibilities include overseeing the stateâs securities division. He warned:
âItâs also subject to manipulation, because no one can explain it, no one can control it.â
Galvinâs comments are the latest from U.S. regulators that warn investors about risks associated with cryptocurrencies, following the Securities Exchange Commission and the Financial Industry Regulatory Authority earlier this month.
Yet, it wasnât Galvinâs first comment on the bitcoin market. Earlier this month, Galvin issued a press release cautioning against âbitcoin mania,â while saying he is not coordinating with other state regulators on the issue at the moment.
The release listed seven points for investors to consider before buying bitcoin, including checking fees on exchanges, the inability to recover stolen funds and the wild fluctuations in price.
The federal government has also been cautioning investors about the cryptocurrencyâs historic rise. Galvin said, âwe all seem to agree that this is a problem,â and also extended his concerns to issues around other activities such as initial coin offerings.
âWe believe they (ICO) certainly qualify as securities,â Gavin said, adding âThis is clearly an area with potentials for fraud. And we are very concerned about that.â
Massachusetts State House image via Shutterstock.