Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has penned a letter to Senator Elizabeth Warren (D-MA) stating that crypto investors “are not adequately protected.”
The letter is a response to a separate letter written by Senator Warren on July 7, 2021, where the Senator raised concerns about consumer protection in the cryptocurrency industry.
“In my view, the legislative priority should center on crypto trading, lending, and [decentralized finance] platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending,” Gensler wrote.
Gensler and Warren have both spoken out against the lack of regulation and consumer protections in today’s crypto industry, and the release of this letter confirms that both individuals stand side by side to address these risks.
What can the crypto industry expect?
This is not the first time Gensler has made his intentions for the crypto industry clear.
Just last week, the SEC chair spoke in an exclusive CNBC interview as well as at an address at the Aspen Security Forum.
During both events, Gensler made specific statements about his stance on crypto. Among the most prominent of those was the claim that decentralized finance (DeFi) platforms could be selling unregistered securities.
He reiterated the same point in today’s letter to Senator Warren. “I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight,” he wrote.
The SEC chair also took aim at stablecoins in today’s letter.
“The use of stablecoins on [crypto] platforms may facilitate those seeking to sidestep a host of public policy goals connected to our traditional banking and financial system: anti-money laundering, tax compliance, sanctions, and the like,” he said.
Gensler’s letter responded to one of Senator Warren’s chief questions on the current state of the crypto industry—whether there was any difference between traditional securities exchanges and crypto exchanges.
“Unlike other trading markets, where investors go through an intermediary, people can trade on crypto trading platforms without a broker—24 hours a day, seven days a week, from around the globe,” he said.
Given that fact, the SEC chair believes the United States needs “additional authorities” to prevent crypto activity from “falling between regulatory cracks.”