In a much-anticipated reply, U.S. Securities and Exchange Commission Chair Gary Gensler has written to Sen. Elizabeth Warren saying “crypto investors are not adequately protected.”
Fast facts
- “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 in a letter that has only just been made publicly available.
- Gensler was responding to a July 7 letter penned by Sen. Warren regarding the SEC’s authority over the crypto industry and asking what congressional regulatory action should be taken. The Senator had originally asked for a response by July 28.
- Industry watchers have not had to wait for the arrival of the letter for insight into Gensler’s opinion of crypto. In a recent address at the Aspen Security Forum, Gensler said the crypto economy was still a “Wild West” and called on Congress to grant the SEC greater power to regulate the industry.
- Speaking at a recent Senate Banking Committee hearing, Warren — a longtime consumer advocate who now heads the Senate Banking Committee’s Subcommittee on Economic Policy — said: “Instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy, faceless group of super-coders and miners, which doesn’t sound better to me.”
- Gensler’s letter is being made public amid a failed lobbying attempt by the crypto industry to create an exemption for miners and other network validators for the Biden administration’s US$1 trillion infrastructure plan, which passed the Senate earlier this week. Included in the bill was a provision to increase crypto tax reporting requirements to raise an estimated US$28 billion in revenues for the federal government over a decade.