Warren asks SEC to take closer look at cryptocurrency exchanges

Sen. Elizabeth WarrenElizabeth WarrenWarren slams Wells Fargo decision to close customer credit lines Schumer warns August recess in danger as infrastructure work piles up The Hill’s Morning Report: Afghanistan’s future now up to Afghans, Biden says MORE (D-Mass.) is asking the Securities and Trade Fee (SEC) to evaluate the impact of cryptocurrency exchanges on U.S. monetary markets and the dangers they may pose to customers.

In a letter released Thursday, Warren requested SEC Chairman Gary GenslerblankGary GenslerHillicon Valley: Warren asks SEC to take closer look at cryptocurrency exchanges | Maryland town knocked offline as part of massive ransomware attack | Huawei hires three new lobbying firms Warren asks SEC to take closer look at cryptocurrency exchanges California AG wants SEC to ‘use its regulatory authority’ on climate change MORE to clarify if cryptocurrency exchanges function in a secure and environment friendly manner, and what regulatory motion is likely to be needed to guard traders.

“Whereas demand for cryptocurrencies and the usage of cryptocurrency exchanges have skyrocketed, the dearth of commonsense laws has left abnormal traders on the mercy of manipulators and fraudsters,” she mentioned.

“These regulatory gaps endanger customers and traders and undermine the protection of our monetary markets. The SEC should use its full authority to handle these dangers, and Congress should additionally step as much as shut these regulatory gaps and be sure that each investor has entry to a secure cryptocurrency market,” she added.

Warren is the most recent Democratic lawmaker to push regulators towards a harder stance on cryptocurrency buying and selling after a flood of investor demand for digital tokens. Whereas costs for in style cryptocurrencies resembling Bitcoin and Ethereum have since plunged from peaks set earlier this yr, the push of exercise has raised questions and considerations amongst many skeptics.

Gensler has expressed an openness to the methods cryptocurrencies may enhance or innovate inside the monetary system, making him extra receptive to the business than many different Democrats. Even so, he’s additionally raised considerations a couple of lack of federal visibility and requirements for a lot of in style cryptocurrency exchanges.

Many such exchanges are regulated by state cash transmission companies, and a variety of funding merchandise tied to them fall beneath the SEC’s purview. 

However cryptocurrency exchanges don’t essentially fall beneath the SEC’s jurisdiction as a result of the tokens themselves usually straddle the traces between securities, currencies and commodities.

Each Gensler and Jay Clayton, his Republican predecessor as SEC chair, have requested Congress for larger authority to manage the cryptocurrency business. Doing so may even require coordination among the many SEC, the Commodity Futures Buying and selling Fee, the Treasury Division and sometimes financial institution regulators.

“These regulatory gaps additionally lengthen to the way in which that cryptocurrency exchanges maintain a person’s crypto-assets, which might not be allowed on a conventional securities alternate,” Warren wrote.

“The harms to customers because of this under-regulated market are actual and proceed to proliferate within the absence of efficient SEC laws.”



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