The U.S. Securities and Exchange Commission will need to provide answers by July 28.
Key Takeaways
- In a newly published letter, Elizabeth Warren has asked the SEC to provide answers on regulatory questions.
- Depending on the SEC's answers, the regulator may be granted additional authority to close regulatory gaps.
- Warren also commented on cryptocurrency in June.
U.S. Senator Elizabeth Warren has published a letter to the SEC, asking the regulatory body to confront the potential risks of cryptocurrency and answer questions about current regulation.
Regulations Are Needed, Warren Says
In a statement related to her letter, Warren noted:
“While demand for cryptocurrencies and the use of cryptocurrency exchanges have sky-rocketed, the lack of common-sense regulations has left ordinary investors at the mercy of manipulators and fraudsters.”
Warren’s letter observes that, in a five-month period, 7,000 individuals reported a total of $80,000 in losses from crypto scams. That statistic was based on a report from the FTC published in May. She added that even legitimate crypto investments come with risk.
Warren demanded that the U.S. SEC comment on certain matters by July 28—namely, whether cryptocurrency exchanges are operating fairly, the problem of jurisdictional gaps, the legality of decentralized exchanges and DeFi, and the extent of the SEC’s own authority.
She drew attention to Binance, which is currently facing regulatory blocks in the U.K. She observed that Binance operates worldwide but has no base of operations and used the exchange as an example of a business that has taken advantage of jurisdictional gaps.
The letter explains that Congress may need to act to give the SEC authority to close regulatory gaps, depending on the SEC’s answers.
Warren Has Commented on Crypto Before
Warren has also made similar comments in the past. In June, she suggested that the U.S. government must confront crypto threats. She also criticized the power consumption involved in mining.
Additionally, in 2018, Warren highlighted the risks of investing in Initial Coin Offerings after the conclusion of the ICO boom.
Elizabeth Warren is a Massachusetts Democrat; she serves as the the Senate Banking Committee’s Subcommittee on Economic Policy.