Elizabeth Warren Gives SEC Chair Gensler A July 28 Deadline to Reveal Regulatory Approach Towards Crypto Exchanges

Senator Elizabeth Warren wants to know what the U.S Securities and Exchange Commission (SEC) is doing to regulate cryptocurrency exchanges in the country.

SEC Given July 28 Deadline to Figure Out Crypto Regulation

Warren penned down a letter to SEC Chair Gary Gensler requesting that the regulator provide answers on its regulatory role over cryptocurrency exchanges by July 28. The senator, who chairs the Senate Banking Committee's Subcommittee on Economic Policy, emphasized the need for crypto investor protection.

"I write to request information regarding the Security and Exchange Commission's (SEC's) authority to properly regulate cryptocurrency exchanges and to determine if Congress needs to act to ensure that the SEC has the proper authority to close existing gaps in regulation that leave investors and consumers vulnerable to dangers in this highly opaque and volatile market."

According to Warren, the regulatory gaps endanger consumers and investors and undermine the safety of the financial markets. The Democrat senator also commented on the decentralized finance (DeFi) space in her letter, highlighting the recent increase in scammy projects on the platform. Other Federal officials have spoken about the DeFi sector in recent times. Last month, CFTC commissioner Dan Berkovitz cited DeFi as a challenge for market regulators like the CFTC. He remarked that federal regulators should be familiar with this portion of the crypto market to prepare to protect the public against misuse.

Elizabeth Warren, the Crypto Critic

Warren has long been critical of cryptocurrency, especially Bitcoin. In an interview with CNBC's "Squawk Box" in March, She described Bitcoin as a speculative asset. Warren had backed comments made by Treasury Secretary Janet Yellen–another well-known crypto critic. Yellen had noted that cryptocurrency was a growing problem while citing its use in illegal activity such as drug trades and terrorist funding. Last month, Warren also criticized Bitcoin and other cryptocurrencies in a Banking Senate Subcommittee hearing. She talked about the lack of regulatory clarity involving crypto and the energy usage of proof-of-work cryptocurrencies. Warren also spoke about Bitcoin's energy consumption, describing the crypto industry as a "Wild West" in need of regulation. Other government officials that have been critical of Bitcoin include US Rep and chairwoman of the House Financial Services, Maxine Waters. Waters revealed plans of creating a working group with Democratic House members to tackle growing security concerns on cryptocurrencies. Voices in support of regulating the crypto sector have increased in the wake of multiple crypto-ransomware attacks against U.S companies. In May, a major pipeline firm, Colonial Pipeline, was hacked by a Russian group, which led to the firm paying $5 million in ransom. Apart from Colonial Pipeline, companies like CNA Financial, JBS Holdings were also hacked recently.