Here are three pertinent questions from Sen. (D) Warren’s latest letter which awaits SEC’s response:
- Are crypto exchanges [operating in a] fair, orderly and efficient manner?
- Does the US crypto space need additional protection for investors?
- Should the US coordinate with international regulatory measures?
U.S Democrat Senator, Elizabeth Warren recently penned down a critical letter to Gary Gensler, the chief US Security and Exchange Commission (US-SEC) officer, over what she believes are multiple and harmful regulatory loopholes regarding exchange providers within the crypto-space. A quote from Warren’s letter says:
“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.”
Warren’s letter is reported to have issued a 20-day ultimatum to Gensler to tidy up its regulatory loopholes and report possible ways crypto exchanges are stifling the process of creating governing rules or risk a possible congress involvement in the regulatory decision-making process afterward.
The former presidential aspirant who currently chairs the US Senate Banking Committee’s Subcommittee on economic policy stressed her reason for issuing an ultimatum as based on the “lack of common-sense regulations [within the crypto industry, which] has left ordinary investors at the mercy of manipulators and fraudsters,” to this, she adds a certain statistics that report over $80 million in losses from approximately 7,000 crypto investors during a period of six months ending March 2021.
This would mark the third time the septuagenarian senator is putting a call out to the SEC – the first for crypto-related issues, after two separate remarks in reaction to Gamestop’s hedge fund crisis in January and March – over discrepant behavior that tends to permeate through its soggy regulatory framework.
Widely known as a staunch crypto critic, Warren was once quoted as dismissing Bitcoin as merely an asset “speculative in nature” and most likely bound to “end up badly.”
Eyes On Binance and Coinbase
Binance and Coinbase account for the two biggest exchanges in the US, and it’s clear how the call by Warren tends to incite the SEC to ostracize both exchange platforms rather than offer them a seat at the decision-making table. This is partly the problem SEC currently suffers with established digital currencies which grow in leaps and bounds of dominance without getting a chance to contribute to the design of SEC’s regulatory framework.
Binance recently received a hard ban in the UK over its elusive tactics against the nation’s regulatory laws, with other countries like Japan, Germany, Cayman Islands, Thailand, and Canada putting a red alert on the activities of the largest global exchange platform. While Coinbase, which recently recorded a 1000% value upshoot in crypto exchange activities to arrive at $335 million in Q1 2021, still strives to play safely in the territories it operates, the US-based exchange platform has also had its fair share of hurdles which it has had to innovate around to keep afloat.
Gensler Yet To Respond
There’s yet to be a response from the SEC chair, Gary Gensler on Warren’s ultimatum. Gensler, who worked as an MIT Blockchain Professor before resuming office, has repeatedly called on the US government to see ways to fully and officially integrate crypto into its list of financial transaction options. There is much doubt about the possibility of the proposed rollout of the US CBDC as a state-backed digital currency.
The next days could be hectic for Bitcoin and the entire crypto space.