Senator Elizabeth Warren wants more enforcement from SEC in the crypto space

The US Securities and Exchange Commission (SEC) needs to take steps to protect consumers from the malicious person in the crypto space, Senator Elizabeth Warren. Said July 17th Yahoo Finance.

Warren said:

“Parliament needs to act, but the SEC is responsible for using that authority to set up guardrails and crack down on cryptocurrency actors who violate the rules.”

Warren, who has been “warning cryptocurrencies” for some time, said he needed “stronger rules to protect customers and financial stability.” She added that “too many crypto companies” have scammed recent customers and “insiders” are making money.

Aside from MPs, many analysts are wondering why the SEC was less aggressive, according to a Yahoo Finance report.

Gensler’s view

SEC Chair Gary Gensler has repeatedly stated that almost all cryptocurrencies have been securities since 2021. Gensler also likens stablecoin to “casino chips” and the crypto market to “wild west.” This refers to the western state of Mississippi, where infestation was widespread until the 20th century.

Gensler is also repeatedly seeking exchanges to register with the SEC. However, the unnamed crypto industry lobbyist quoted by Yahoo Finance said most crypto industry players are afraid to approach and get involved with the SEC because they are afraid of enforcement measures. Lobbyists added that more enforcement action is expected from the SEC.

and interview When asked at Yahoo Finance on July 14 why the SEC wasn’t acting any further to develop rules to protect consumers, Gensler said the rules were already in place. rice field. Gensler said:

“We have rules about what it means to be an investment company like an investment trust when you put your money in.”

However, Gensler added that it makes sense to adjust stock disclosure requirements to cryptocurrencies, so customers can know that “someone isn’t lying to them.” He also said that consumers remain unprotected primarily due to industry non-compliance.

Gensler also pointed out the SEC’s enforcement measures against crypto companies over the past few months, including those against BlockFi. The SEC uses enforcement measures to promote compliance with securities trading laws.

The urgency of the rules in the midst of bankruptcy

Warren’s call for action comes when the crypto industry is recovering from bankruptcy from two major lenders and a prominent crypto hedge fund. In the aftermath, crypto investors have a rude awakening that there is no government safety net to protect against the failure of crypto platforms.

Three Arrows Capital (3AC) was liquidated by a court in the British Virgin Islands in June. Voyager Digital, which had over $ 650 million in exposure to 3AC, declared bankruptcy within a week.

After that, Celsius, who had more than 1.7 million customers and managed nearly $ 12 billion in assets in May, declared bankruptcy on July 14.

These bankruptcies add to the urgency of investor protection rules. Senator Bob Menendez told Yahoo Finance:

“The recent cryptocurrency turmoil makes it clear why Congress and financial regulators need to work together to create a robust regulatory framework for digital assets that protects consumers and provides clarity to investors. This is an example. “

According to a Yahoo Finance report, lawyers say the SEC is waiting for the outcome of the Ripple case to set a precedent for rulemaking. The SEC has charged Ripple with offering unregistered securities. Ripple continues to fight in the ongoing court battle. The outcome of the proceedings proves that the SEC’s allegations regarding securities XRP and similar tokens are correct.

SEC authority may be limited

Some analysts claim that SEC’s attempts to govern in cryptocurrencies are inadequate, while others believe that SEC has made a significant amount of money. Todd Phillips, director of financial regulation and corporate governance at the Center for American Progress, quoted the SEC’s enforcement action as telling Yahoo Finance that it is using its resources “very effectively.”

Todd said:

“Under Gensler, they are doing everything they can. They can only do so much because the SEC has so many resources and executive lawyers.”

But for bankruptcy lending platforms like Celsius and Voyager, the SEC’s powers could be limited, Todd said. Therefore, he added, it is unfair to “criticize” the SEC when it “does not have the authority to govern them.”

Gensler work Work with the Commodity Futures Trading Commission to create one rulebook to regulate cryptography to avoid monitoring gaps.