August 11, 2021

Warren Releases Response from SEC Chair Gensler Affirming Need to Regulate Cryptocurrency Exchanges and Protect Investors and Our Financial System

Response from Chair Gensler | Warren Letter to SEC

Washington, DC - United States Senator Elizabeth Warren (D-Mass.), chair of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, today released a response from Securities and Exchange Commission (SEC) Chair Gary Gensler to her July 7th letter on the need to regulate cryptocurrency exchanges and protect consumers from risks posed by the highly volatile cryptocurrency market. Gensler’s letter reflects remarks he made last week about the need for greater investor protection and oversight of digital currencies.

Statement from Senator Warren: 

“Cryptocurrency is the wild west of our financial system and desperately needs rules of the road and common-sense oversight in order to protect the stability of our financial system and ensure that every investor has access to a safe cryptocurrency marketplace. 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. I’m going to continue to engage with the SEC and other federal regulators on this, and will work to close regulatory gaps through legislation.”

In his response, Chair Gensler explained that cryptocurrency platforms currently lack adequate protections, potentially running afoul of securities, commodities, and banking laws and raising “a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.” In particular, he cited the need for Congress and regulators to provide guardrails for crypto trading, lending, and decentralizing finance (DeFi) platforms. Chair Gensler requested “additional authorities to prevent transactions, products, and platforms from falling between regulatory cracks,”  as well as “more resources to protect investors in this growing and volatile sector.”