U.S. Securities and Exchange Commission (SEC) Chairman Gensler told Warren that his agency needs more resources to tighten regulations on cryptocurrency exchanges and protect American retail investors.
Gary had written the letter in response to the letter addressed to him demanding answers related to cryptocurrency regulation. A letter that Warren released on Wednesday, told the senator that Congress should center legislative priority on giving watchdogs more authority to write and implement rules.
“I believe we need additional authorities to prevent transactions, products, and platforms from falling between regulatory cracks,” Gensler said. “We also need more resources to protect investors in this growing and volatile sector.”
In the letter, Gensler explained that the cryptocurrency market is made up of platforms where people can trade or lend tokens on centralized and decentralized platforms. He also urged that stable-coins may be used on these platforms to avoid traditional banking rules, “anti-money laundering, tax compliance, sanctions, and the like.”
“It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides a synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime,” Gensler writes.
He also instructed on the common practice done by certain platforms that don’t allow US investors to trade: VPNs. VPNs give internet users some level of anonymity by creating a private network from a public connection.
“Unlike other trading markets, where investors go through an intermediary, people can trade on crypto trading platforms without a broker — 24 hours a day, 7 days a week, from around the globe. “ Gary wrote explaining the difference between traditional and crypto-assets.
“I’m glad SEC Chair Gensler agrees and has directed the SEC to use its full authority to address these risks, and that he has also identified where additional regulatory authority may need to be granted by Congress,” Warren said in a statement, also promising to work on legislation to close the regulatory gaps.