SEC Gensler Tells Sen. Warren SEC Needs More Crypto Regulations

[ad_1]

US Senator Elizabeth Warren (D-MA) questions Charles P. Rettig, Commissioner of the Internal Revenue Service, during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, in the office building of the Dirksen Senate in Washington, DC on June 8, 2021.

Tom Williams | Swimming pool | Reuters

Senator Elizabeth Warren keeps up the pressure to curb cryptocurrency trading.

On Wednesday, she released the letter that Securities and Exchange Commission Chairman Gary Gensler wrote in response to his July 7 request that he tackle the highly opaque and volatile cryptocurrency market and determine whether Congress must act.

“At the moment, I think investors using these platforms are not being adequately protected,” Gensler said in his response to the Massachusetts Democrat, dated Thursday.

The letter echoes Gensler’s comments made at the Aspen Security Forum two days earlier, where he called the asset class “rife with fraud, scams and abuse” and asked Congress additional authority to prevent “crypto transactions, products and platforms from falling through regulatory cracks.”

The letter’s release comes as the industry has not removed new tax reporting requirements for cryptocurrency brokers from the Senate Infrastructure Bill. These new requirements could help pay $ 1 trillion in spending planned in the bill by generating estimated revenues of $ 28 billion for the government over 10 years.

In the letter, Gensler explains that the cryptocurrency market is made up of platforms where people can trade or lend tokens on centralized and decentralized platforms. And he warns that stablecoins, a type of cryptocurrency attached to an asset like the dollar, can be used on these platforms to bypass traditional banking rules, “anti-money laundering, tax compliance, sanctions, etc.”

“It doesn’t matter whether it’s a stock token, a stock-backed value token, or any other virtual product that offers synthetic exposure to the underlying securities. These products are subject to securities laws and must operate within the framework of our securities regime, ”Gensler writes.

To date, the SEC has used its enforcement power to establish itself as the primary cryptocurrency regulator, winning cases of fraud and unregistered securities offerings. He pledged to continue using the current law to prosecute fraud and ensure tokens are registered as securities, which subjects them to disclosure rules and regulatory oversight.

“I am pleased that the Chairman of the SEC, Gensler, has agreed and has asked the SEC to use all of its authority to deal with these risks, and that he has also identified where additional regulatory authority may need to be. be granted by Congress, ”Warren said in a statement, also promising to work on legislation to fill regulatory gaps.

Warren, a member of the Senate Banking Committee and chairman of its sub-committee on economic policy, also called on the Financial Stability Supervisory Board to use its authority to take the lead in developing a comprehensive and coordinated approach to the regulation of cryptocurrencies.

[ad_2]