(Kitco News) – Crypto exchanges aren’t well-regulated, and many digital coins “really don’t have anything backing them up,” said Maureen Jensen, former president and CEO of the Securities and Exchange Commission. Ontario (OSC). The OSC oversees securities in the Canadian province of Ontario. “A lot of these exchanges don’t require registration and don’t follow the rules,” she said.
Jensen spoke with David Lin, presenter and producer at Kitco News, at the PDAC 2022 convention in Toronto.
Quadriga and other frauds
Crypto exchanges are not well regulated, Jensen said, citing instances in the past where client funds were at risk.
“[The exchange is] a custodian of your money, unless you ask to put it in your wallet,” Jensen said. “In many cases, they don’t. And then when you go to settlement and want to withdraw it, it’s not available or it’s taking too long… There have been people who have bought and sold bitcoin who couldn’t get their coins out for months. The problem is that there is no obligation on these exchanges. They are unregulated.”
Jensen cited the case of Quadriga, which was the largest crypto exchange in Canada. In 2019, Quadriga went bankrupt after allegations that the CEO was trading with clients’ Bitcoin and operating a Ponzi scheme.
Warning that it may happen again, Jensen stressed the need for more regulation. She said investors should determine, “What is this coin? What sustains it? Who is developing this coin and where will it be traded? You have to see, are they good players in the industry? Do they have capital behind them, or are you the capital?”
Jensen sees the world divided between the West, dominated by the United States, and the East, commandeered by Russia and China. This, in turn, means more volatility globally.
“We’re going to have inflation and we’re going to have problems with supply chains,” she said. “…For example, we suddenly have a Russian-Ukrainian occupation, and now the price of oil is skyrocketing, because the Russians have cut their oil and gas supply by 40% in the last two months.”
Jensen pointed to geopolitical tensions in Eastern Europe and a “more militaristic China.” She also pointed to the risk of China and Russia using their strategic metal reserves to corner markets for rare earth minerals. “We have to think about expanding our supply chain,” she said.
She remarked: “As soon as there’s an armed conflict anywhere in the world, you’ll start thinking about ‘what do I need to make sure I’m safe, that I can build my infrastructure? “”
To find out which metals Jensen thinks will dominate in the future, watch the video above.
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