It is. Elizabeth WarrenElizabeth Warren California Democrats warn of low turnout Pelosi denies Biden’s authority to make student loans (D-Mass.) Is calling on the Securities and Exchange Commission (SEC) to assess the impact cryptocurrency exchanges have on US financial markets and the risks they could pose to consumers.
In a letter released Thursday, Warren asked the SEC chairman Gary GenslerGary GenslerHillicon Valley: Warren Asks SEC To Take A Closer Look At Cryptocurrency Exchanges | Maryland City taken offline in massive ransomware attack | Huawei hires three new lobbying firms Warren asks SEC to take a closer look at cryptocurrency exchanges Explain whether cryptocurrency exchanges are functioning securely and efficiently and what regulatory measures may be required to protect investors.
“While the demand for cryptocurrencies and the use of cryptocurrency exchanges have skyrocketed, the lack of sound regulation has left ordinary investors at the mercy of the manipulators and scammers,” she said.
“These regulatory loopholes put consumers and investors at risk and undermine the security of our financial markets. The SEC must use its full authority to address these risks, and Congress must also fill those regulatory loopholes and ensure that every investor has access to a safe. “Cryptocurrency marketplace,” she added.
Warren is the latest Democratic lawmaker to urge regulators to take a tougher stance on cryptocurrency trading after a spate of investor demand for digital tokens. While prices for popular cryptocurrencies like Bitcoin and Ethereum have since fallen from highs set earlier this year, the onslaught of activity has raised questions and concerns among many skeptics.
Gensler has expressed his openness to how cryptocurrencies could improve or renew the financial system, making him more receptive to the industry than many other Democrats. Nonetheless, he has also raised concerns about a lack of federal visibility and standards for many popular cryptocurrency exchanges.
Many of these exchanges are regulated by state money-moving agencies, and a wide range of investment products associated with them fall under the purview of the SEC.
However, cryptocurrency exchanges do not necessarily fall under the jurisdiction of the SEC, as the tokens themselves often cross the boundaries between securities, currencies, and commodities.
Both Gensler and Jay Clayton, his Republican predecessor as SEC chairman, have asked Congress for more powers to regulate the cryptocurrency industry. This also requires coordination between the SEC, the Commodity Futures Trading Commission, the Treasury Department, and occasionally banking regulators.
“These regulatory loopholes also extend to the way cryptocurrency exchanges hold a person’s crypto assets, which would not be allowed on a traditional stock exchange,” Warren wrote.
“The harm to consumers from this under-regulated market is real and continues to exist” increase in the absence of effective SEC regulations. “