Senator Elizabeth Warren writes letter to SEC Chairman Gary Gensler Regulatory authority to properly regulate cryptocurrency exchanges and How the SEC can bridge existing regulatory gaps Whether Congress needs to act to have the appropriate powers requested information about the authority to make a decision Warren requested a response by July 28. In this opaque and unstable market Investors and consumers noted that this is especially risky now, when trading volume has skyrocketed. Coinbase, the largest U.S. exchange, is expected to rise from $30 billion in Q1 2020 It exploded more than 10 times in the first quarter of 2021 This even happened before the IPO Coinbase is now trading on Nasdaq It may be wary of directly buying risky digital securities. while facilitating trading for mainstream investors Allows you to own shares in a business approved by the Securities and Exchange Commission After that, the senator declared that 95% of the Bitcoin trading volume listed on CoinMarketCap was are inherently fake or uneconomical; It pointed to a regulatory gap that allowed for volume manipulation, an issue related to the custody of assets.
“Cryptocurrencies traded on exchanges are deposited and probably mixed with other people's deposits It is not recorded on the blockchain. It is represented as an entry in a centralized ledger. It is not insured and there is no guarantee that the trader will receive it. Traders have to rely on brokers,” he said. The US senator also said that close to 20% of the transaction volume executed on Coinbase was Noting the 2018 report that it is exclusive “Besides, cryptocurrency exchanges lack the same type of regulation as traditional stock exchanges. to use the customer without sufficient disclosure; They may engage in criminal practices such as monopoly or money laundering transactions,” he added. Responses requested by July 28, 2021 Here's the question Senator Warren sent to the SEC chairman: “1. Do you believe that cryptocurrency exchanges are currently fair and orderly? Do you believe in operating in an efficient manner? 2. If not, what issues has the SEC identified with the use of these exchanges? The characteristics of assets traded on cryptocurrency exchanges are 3.
How is it different from assets traded on traditional stock exchanges? These characteristics are compared to those offered on traditional exchanges. Guaranteeing additional investor and consumer protection for cryptocurrency exchanges? 4. Describe the extent of the SEC's existing authority to regulate existing cryptocurrency exchanges. To what extent is that authority different from the authority of an institution over a traditional stock exchange? 5.
Foreign regulators have been calling for international coordination to close regulatory gaps in recent years. Moved towards restricting cryptocurrency exchanges in jurisdictions Certain regulatory challenges may arise from the unique organizational structures of some global exchanges. For example, by trading volume, one of the largest cryptocurrency exchanges in the world is Binance is everywhere but not based anywhere Cryptocurrency exchanges this year through affiliates Remittance of digital and traditional assets around the world Handled trillions of dollars of transactions. However, there is no headquarters. In your opinion, bridging the gap in cryptocurrency exchange regulation and To what extent is international coordination necessary to ensure the protection of US investors and consumers? In a recent speech, CFTC Commissioner Dan Berkowitz said: In a pure peer-to-peer (P2P) DeFi (Decentralized Finance) system, monitor markets for fraud and manipulation; prevent money laundering; Protect the deposited funds and guarantee the performance of the other party, or When the process fails, there is no vehicle to make the customer completely A system without intermediaries is a Hobbes market, where each individual takes care of himself. Berkowitz also argues that DeFi derivatives are likely to be illegal under the Commodity Trading Act.
Do you agree with Commissioner Berkowitz's evaluation of the DeFi platform? Decentralized platforms are within the jurisdiction of the SEC. Does it raise similar investor and consumer protection concerns? So, what challenges does the SEC face in addressing these concerns? The characteristics of the decentralized cryptocurrency exchange are Compared to what is needed for a centralized cryptocurrency exchange Does it guarantee additional investor and consumer protection?" One question comes to mind when I see Senator Warren's questions. Gensler, Senator Warren, and the SEC Are you doing "manipulated power play" to go beyond CFTC? The Twitter community described the letter as “a message on digital assets and ecosystems. Aiming to ensure that the authority of the Securities and Exchange Commission is provided It is a chess action," and is sounding the alarm. Ron Hammond, Director of Government Relations, Blockchain Association "Gensler and Warren are uniquely close and I think the SEC saw this letter before it was released," he said.
James Philan, an influential lawyer close to the XRP community, strongly condemned “This is what Gensler, Warren and the SEC are trying to do to control the crypto space. It is to unfold "manipulated power play" that wants to go beyond the CFTC. Warren gave Gensler every chance he could say the SEC should control. What she didn't ask him was if he wanted a puppy." "The SEC's loop is this: 'They bring buyers and sellers together to trade and such as executing trades and displaying prices Despite sharing many characteristics of traditional stock exchanges, If a digital asset being traded does not qualify as a security under federal law, Cryptocurrency exchanges can escape federal regulations I have an answer to Warren's question I think it was already drafted before the actual question." US lack of clarity fuels dispute between SEC and CFTC Lack of regulatory clarity on emerging digital asset classes in the US It has generated a lot of controversy over the years, the most recent being the 'SEC vs Ripple' lawsuit.
What makes cryptocurrency a security, and under the authority of the CFTC or SEC. There is still no clear understanding of whether it should be regulated The Ripple lawsuit has been widely viewed as an opportunity to finally get rid of all questions CFTC Commissioner, Dunn Stump "Regulators are closely monitoring the outcome of the SEC Ripple lawsuit," he said publicly. The question of whether XRP is a security will be very important. According to SEC Commissioner Hester Pierce of 'Cryptomam' In order for the SEC to sue a blockchain company Digital assets do not have to be securities As the SEC moves to move beyond the CFTC, Even coins that are likely to receive further scrutiny from regulators It seems to be under threat within the scope of regulation.