The United States democrat senator, Elizabeth Warren wrote a letter to the Chair of the Security Exchange Commission (SEC) to look into the matter of cryptocurrency regulation and the risks it inhabits, seemingly increasing daily. She gave the latter an ultimate deadline to reply to this letter with effectiveness, July 28, 2021.
Elizabeth Warren Expresses Concern About Cryptocurrency Regulations And Urges The Congress To Get Involved
The US Democrat senator of Massachusetts, Elizabeth Warren who serves as the chair of the Senate Banking Committee’s Subcommittee on Economic Policy. She wrote a letter on Wednesday, to the Chairperson of the Security Exchange Commission (SEC), Gary Gensler laying down concerns about the lack of proper crypto regulation, and points out the risks and crimes that have occurred within the last few months.
She calls for answers to questions she put forward in the letter, Sen. Elizabeth Warren gave the SEC time till the last of this month, 28 July 2021 (to be exact). She calls the cryptocurrency market “highly and opaque and volatile” while declaring the statistics of about 70,000 investors incurring a combined loss of 80 million USD due to fraudsters and money launderers, in the last six months (dated till March 2021).
Cryptocurrency investments incur huge margins of profits in less time compared to stocks or commodities. This might be why cryptocurrency became extensively popular and the demand rose rapidly over a few years (despite it existed for a decade or so). United States’ most popular interface for cryptocurrency exchange, Coinbase reported its largest amount of exchange. The volume estimates at 335 billion USD, an evident increase of about ten times that last year. Besides the US, the worldwide cryptocurrency capitalization reached an amount of 2 trillion USD, in April 2021.
Data from Reuters specify, Sen. Warren said, “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,”.
She later adds to it, “These regulatory gaps endanger consumers and investors and undermine the safety of our financial markets. The SEC must use its full authority to address these risks, and Congress must also step up to close these regulatory gaps.”
In one of our former pieces, we spoke about the SEC’s cryptocurrency regulations stance. Gary Gensler said that cryptocurrency must be incorporated under legal legislation but shouldn’t be infringed upon. According to him, there are new rules yet to be proposed regarding the concerned subject.
However, Elizabeth Warren’s letter mentioned that the cryptocurrency arena lacked basic protections. She alluded that Gensler might be undermining the duty, SEC represents; to provide protection to the investors and look after whether the market is operating in a “fair, orderly, and efficient manner”. She added,” “The lack of regulation to provide basic investor protections is unsustainable.” Along with this, she mentions that the New York Stock Exchange and Nasdaq are regulated by Commodity Futures Trading Commission (CFTC) and SEC, the cryptocurrency market might require Congress to step in and consider looking after the cryptocurrency regulations.
The respective former presidential candidate also asked several questions in her letter, to which Gensler didn’t respond immediately. Hence the deadline for replies to the requested information. Few of the questions are, quoting from her letter-
- “Do you believe that cryptocurrency exchanges are currently operating in a ‘fair, orderly, and efficient manner? If not, what problems has the SEC identified that are associated with the use of these exchanges?”
- “What steps will the SEC take to update and implement rules defining market manipulation? Describe any gaps in the SEC’s current regulatory system.”
What answers will the Chairperson of SEC revert is something to look forward to. The significant concern that arises here is, the congress’ involvement is necessary? The cryptocurrency only losses its fundamental value and its originality is being torn apart. Cryptocurrency in the future seems to be completely centralized and backed by the currency of the respective country.