Warren asks SEC about increased cryptocurrency regulations

Sen. Elizabeth Warren is wondering about increased federal oversight of cryptocurrency trading exchanges and wants the Securities and Exchange Commission to examine its authority to regulate them.

The Massachusetts Democrat raised a number of concerns about cryptocurrency exchanges and platforms in a Thursday letter to SEC Chairman Gary Gensler. She asked for more information about the SEC’s authority to oversee the exchanges in order to determine if Congress needs to take action.

“The increased use of cryptocurrency exchanges presents unique risks to consumers,” she wrote. “Although they describe themselves as cryptocurrency ‘exchanges,’ these platforms lack the same types of basic regulatory protections as traditional national securities exchanges like the New York Stock Exchange or Nasdaq.”

She said that while cryptocurrency exchanges share similar features to traditional exchanges, cryptocurrency exchanges may be able to evade regulation if the digital asset being traded is not seen as a security under U.S. law.


Warren pointed out that Gensler has previously acknowledged that the exchanges lack a regulatory framework at both the SEC and the Commodity Futures Trading Commission and, thus, there aren’t really protections against fraud or manipulation in place.

“Instead, these platforms are generally subject to state-level regulations for money transfer or payment services,” she said. “These regulations were not initially designed to provide oversight for sophisticated, exchange-like operations and are insufficient to ensure a safe cryptocurrency marketplace.”

Warren also noted that cryptocurrency traders must place their trust in the intermediary exchange platform because their funds are uninsured and there is no guarantee that the trader can ultimately recover his or her cryptocurrency assets.

She said that during the six months from last October until March, almost 7,000 people reported losses from cryptocurrency scams, resulting in $80 million in lost assets — 1,000{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} more in reported losses than the same period the year before.

Warren listed several questions to Gensler and requested responses to them no later than July 28. She asked about the SEC’s current authority in the cryptocurrency realm, to what extent Gensler thinks there should be international regulatory coordination, and what problems the SEC has identified that are associated with the exchanges, among others.


“As the cryptocurrency markets continue to grow and expand, the lack of regulation to provide basic investor protections is unsustainable,” Warren wrote in her letter. “The SEC regulates national securities exchanges, and cryptocurrency exchanges that operate in a similar manner should be subject to similar regulatory standards.”

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Tags: News, Cryptocurrency, Regulation, Bitcoin, Elizabeth Warren, SEC, CFTC, Exchanges

Original Author: Zachary Halaschak

Original Location: Warren asks SEC about increased cryptocurrency regulations

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