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Warren warns of cryptocurrency risks, presses SEC



(Reuters) – US Senator Elizabeth Warren on Thursday warned of the growing risks to consumers and financial markets of the "highly opaque and volatile" cryptocurrency market and blasted its lack of regulation as unsustainable.

Sen. Warren, a Democrat who chairs the Senate Banking Committee's Subcommittee on Economic Policy, also raised concerns in a letter to Securities and Exchange Commission Chairman Gary Gensler on Wednesday, in an attempt to help lay the groundwork for legislation to regulate it. fast-growing

The former presidential candidate said she needed a response from Mr Gensler by July 28 on the SEC's authority to protect consumers who invest and trade in cryptocurrencies and decide what future congressional measures are needed.

Cryptocurrencies reached a record high of $ 2 trillion in April, but US market surveillance remains uneven.

"Although the demand for cryptocurrencies and the use of cryptocurrencies have increased sharply, the lack of common sense rules has left ordinary investors at the mercy of manipulators and fraudsters," Senator Warren said in a statement.

"These regulatory loopholes threaten consumers and investors and undermine the security 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 loopholes." [1

9659002] SEC Speakers and Mr. Gensler did not immediately respond to a request for comment on Wednesday night. [19659002] Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen have warned that cryptocurrencies pose risks to financial stability and suggested greater regulation

Officials from the group of 20 major economies are also expected to discuss the issue when they meet in Venice this weekend.

Mr Gensler, who became SEC chairman in April, has previously said that cryptocurrencies should be incorporated into the financial sector. regulatory system, but has not yet proposed new rules.

In his letter to Gensler, reviewed by Reuters, Sen. Warren said that cryptocurrency outdoor platforms lacked the same basic protection as traditional exchanges, noting that nearly 7,000 people reported a total of $ 80 million in losses from cryptocurrency fraud over six months to March 2021.

Demand for cryptocurrencies has increased over the past year with Coinbase. , the largest cryptocurrency exchange in the United States, which reported the first quarter's trading volume of $ 335 billion in 2021, a tenfold increase over the same period a year ago.

Sen. Warren asked Mr Gensler to describe how cryptocurrency exchanges could undermine the SEC's mission to ensure that markets operate in a "fair, orderly and efficient manner", if additional investor protection was needed and if international regulatory coordination was required.

"The lack of regulation to provide basic investor protection is unsustainable," she added. Catalog

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