- In a letter addressed to the chairman of the SEC, Senator Elizabeth Warren demanded answers on crypto regulation by July 28.
- Warren, who's part of the Senate Banking Committee, is concerned about risks to consumers and investors from the $1.3 trillion market.
- She said Congress may need to act to ensure the SEC has proper authority to close existing regulation gaps.
- See more stories on Insider's business page.
In a Wednesday letter addressed to SEC Chairman Gary Gensler, Sen. Elizabeth Warren demanded the agency answer a series of questions related to cryptocurrency regulation – and said she expects an answer no later than July 28.
The Massachusetts Democrat – who serves as chair of the Senate Banking Committee's Subcommittee on Economic Policy – laid out her goal of protecting investors in the expanding market for digital currencies.
"The increased use of cryptocurrency exchanges presents unique risks to consumers," Warren said in the letter. "Although they describe themselves as cryptocurrency 'exchanges,' these platforms lack the same types of basic regulatory protections as traditional national securities exchanges like the New York Stock Exchange or Nasdaq."
Warren said the information she's requested will help Congress determine if it needs to act to ensure the SEC has the needed authority to close existing gaps in regulation. Those gaps, she said, leave investors and consumers vulnerable to dangers in what she called a highly opaque and volatile market.
Warren also said in her letter that nearly 7,000 people in the US reported losses of $80 million from cryptocurrency scams between October 2020 and March 2021.
"The harms to consumers as a result of this under-regulated market are real and continue to proliferate in the absence of effective SEC regulations," she said.
Warren presented five questions to the SEC, beginning with:
- "Do you believe that cryptocurrency exchanges are currently operating in a 'fair, orderly, and efficient' manner? If not, what problems has the SEC identified that are associated with the use of these exchanges?"
The cryptocurrency market this year has notched a number of milestones including exceeding a valuation of $2 trillion in April as bitcoin topped a $1 trillion market value . Those moves were made alongside the trading debut of Coinbase, the largest crypto exchange in the US. Wall Street banks and other institutions have ramped up their business exposure to the market. Meanwhile, the SEC is considering the application of 13 bitcoin ETFs.
But the cryptocurrency market's valuation has since fallen to roughly $1.4 trillion because of a sell-off in bitcoin, ether, and other digital currencies.