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Senator Elizabeth Warren (D-Mass.) has said the Securities and Exchange Commission should act on the turmoil in the crypto world, with crypto platforms going bankrupt and investors not able to take funds out from some of them.
Speaking to Yahoo Finance Sunday (July 17), Warren said that Congress needs to do something, “but the SEC has a responsibility to use its authorities to put guardrails in place and crack down on crypto actors that break the rules.”
“I’ve been ringing the alarm bell on crypto and the need for stronger rules to protect consumers and financial stability,” Warren added. “Too many crypto firms have been able to scam customers and leave ordinary investors holding the bag while insiders make off with their money.”
There has also been some question as to why SEC Chair Gary Gensler hasn’t done more. One analyst, Jaret Seiburg of Cowen, said Gensler “has to act soon,” or else he’ll likely be blamed for why investors are losing money.
Gensler’s tenure with the SEC has seen the agency not really pushing much in terms of regulating crypto or applying existing securities laws. However, Gensler has also said recently that almost all crypto tokens are securities — so platforms trading them count as exchanges.
When asked why he hadn’t done more so far, Gensler said he didn’t agree with the premise of the question.
“We have rules in place for what it means to be an investment company, like a mutual fund, when you put your money in,” said Gensler, per the report.
But the report noted there’s more enforcement action expected, with one lobbyist saying there’s a big chunk of the industry that won’t interact a lot with the SEC, fearing enforcement actions.
Gensler has not offered to exempt crypto exchanges, lenders and broker dealers from securities laws.
Gensler said that the SEC had “robust” exemptive authorities, and said the SEC was able to “tailor investor protection” to fit specific parts of crypto.
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