The Gamification of Trades: US Securities & Exchange Commission warning
On the afternoon before the UK’s August Bank Holiday, and ahead of Monday’s US Labour Day vacation, Gary Gensler, current chair of the SEC, called for more powers to oversee crypto exchanges. Dubbed by the Financial Times newspaper as the ‘firebrand regulator responsible for implementing the 2010 Dodd Frank Act’ when he was the head of the US Commodity Futures Trading Commission, this man means business and has already shaken up the trillion-plus dollar trading business.
Hot on his heels the European Securities & Markets Authority noted that events so far this year have ‘raise[d] questions about the increased risk-taking behaviour and possible market exuberance’. Well, better late than never… This week CNBC reports that the SEC threatened to sue Coinbase Global Inc. if the company were to allow users to earn interest by lending out crypto assets.
Journalist Katie Martin in the Weekend FT reminded us that ‘most market predictions come from people with skin in the game…investors…talking up their book, analysts wedded to the house view, and so on’. Smartphone apps have ramped up this tone several notches, with some firms claiming to be on the little man’s side in a David versus Goliath battle for trading profits. The firms involved are now well-known, and their victims have tumbled big time this year.
What has this got to do with technical analysts, you ask? Last month the US Food & Drug Administration sent celebrity Kim Kardashian (who has 250 million social media followers) a letter saying they ‘found that the social media posts were false or misleading in that they presented efficacy claims but failed to properly communicate any risk information associated with the drug’ she had promoted. This week the UK’s Financial Conduct Authority cautioned against ‘the hype around [new tokens backed by celebrities] which generates a powerful fear of missing out from some consumers who may have little understanding of their risks’ – Ms Kardashian-West had also been pushing Ethereum Max crypto currency on Instagram.
As many STA members write articles, express market views, and often hide behind the ‘educational purposes only’ blanket, I’m suggesting that regulation of what we do may come under further scrutiny. All I can suggest is to be ultra-careful about what you write and where it is disseminated. Don’t use too much jargon implying you’re one of the ‘in’ crowd with insider knowledge. Never suggest anything will guarantee a profit, especially a ‘get-rich-quick’ one.
When this month China has drastically limited kids’ gaming time on electronic devices, you can see how addictive smartphones, games, and gambling can be when linked together.
Tags: Addiction, Bitcoin, Crypto, Gamestop, Reddit, Regulation
The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.
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