- SEC chief Gary Gensler told Elizabeth Warren his agency needs more resources to tighten regulations on crypto exchanges.
- Gensler’s comments came in response to a letter sent by Warren in July letter demanding answers on crypto regulation.
- “I believe we need additional authorities to prevent transactions, products, and platforms from falling between regulatory cracks,” Gensler said.
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Securities and Exchange Commission Chair Gary Gensler told Sen. Elizabeth Warren his agency needs more resources to tighten regulations on cryptocurrency exchanges and protect American retail investors.
Gensler, in an letter dated August 5 that Warren released on Wednesday, also 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.”
His statement comes after the Massachusetts Democrat senator wrote a letter addressed to him on July 7, demanding answers related to cryptocurrency regulation. Warren said she expects a response no later than July 28.
Elsewhere in his response, Gensler warned that stablecoins – or cryptocurrency tokens pegged to the value of fiat currencies – may be used by some exchanges to sidestep traditional banking policies, including 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 synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime,” he said.
Gensler has said in the past that many crypto assets, including stablecoins, are considered securities – a definition that would place hundreds of coins within the trillion-dollar cryptocurrency market under his agency’s jurisdiction.
He also shed light on an alleged common practice done by some platforms that don’t allow US investors to trade: VPNs. VPNs, or virtual private networks, give internet users some level of anonymity by creating a private network from a public connection.
Gensler, who used to teach digital assets at the Massachusetts Institute of Technology, has been consistent in his stance that cryptocurrencies need to be regulated. In an August speech before the Aspen Security Forum, he called the cryptocurrency market a “Wild West.”