Traders tempted to invest in cryptocurrencies such as bitcoin must carry the burden of responsibility, according to the CEO of a leading cryptocurrency exchange.
“I think ultimately consumers need to look out for themselves, look into the fundamentals of any coin and not rely on any particular exchange to protect them from market volatility,” Jesse Powell, founder and CEO of Kraken, told CNBC on Tuesday.
Speaking at the World Government Summit in Dubai, Powell said Kraken conducted a “thorough” evaluation process to ensure every digital coin available on its San Francisco-based exchange was “almost certainly not a scam.”
“We make no promises about the future of any coin, things can change when you raise $1 billion in 10 minutes,” he said.
‘Declaration of monetary independence’
On Monday, European Union regulators warned cryptocurrencies were unsuitable investments and should be viewed as “highly risky” assets.
The European Supervisory Authorities (ESAs) for securities, banking and insurance and pensions said in a joint statement that the volatile nature of cryptocurrencies was showing “clear signs of a pricing bubble.”
Elsewhere, billionaire investor Warren Buffett warned last month that the recent craze over bitcoin and other cryptocurrencies would almost certainly end badly. And, before walking back on his earlier criticisms at the start of the year, J.P. Morgan Chase Chairman and CEO Jamie Dimon previously described bitcoin as “fraud.”
When asked whether cryptocurrency traders should take the views of such seasoned investors seriously, Nick Spanos, CEO of Blockchain Technologies Corporation, replied: “Warren Buffett is good at renting furniture and whatever other businesses that he does, but we are in a different business,”
“I believe cryptocurrency is the people’s declaration of monetary independence,” he said on the same panel at the World Government Summit.