Senators Press SEC Chair to Crack Down on Crypto Companies
Senators across party lines have urged SEC Chair Gary Gensler to take stricter action against crypto companies. Democrat Sen. Dick Durbin criticized the industry for manipulating prices with tokens of no underlying value and failing to protect customer assets. Durbin also expressed concern about the industry’s efforts to lobby Congress, noting that his campaign received $20,000 from the sector without his knowledge. Meanwhile, Republican Sen. John Kennedy questioned why the SEC didn’t seek an emergency injunction to halt operations at failed crypto giant FTX before its collapse. SEC Chair Gensler defended the underlying technology of crypto but called for increased funding to police the industry. He also criticized trading platforms that combine different market functions.
Gensler Responds to Criticism and Calls for More Funding
- Sen. Durbin criticizes the crypto industry for manipulating prices and failing to protect customer assets.
- He questions the industry’s influence on Congress and expresses surprise at receiving campaign donations from the sector.
- Sen. Kennedy asks why the SEC didn’t seek an emergency injunction against FTX before its collapse.
- SEC Chair Gensler defends the underlying technology of crypto but highlights the need for more funding to police the industry.
- Gensler criticizes trading platforms that combine different market functions.
Senators Discuss Industry Migration and Regulatory Arbitrage
- Republican Sen. Bill Hagerty raises concerns about companies and developers leaving the US due to friction with the legal system.
- Hagerty suggests that a robust rule set in the US could prevent industry players from migrating to jurisdictions with clearer regulations.
- Gensler explains that the industry is leaving the US for countries with less active financial regulation and law enforcement.
Gensler Compares Most Tokens to Venture Capital Investments
Gensler likens most tokens to venture capital investments, noting that statistically many of them are likely to fail. He criticizes the lack of full and truthful disclosures to the investing public.
Hot Take
Senators on both sides of the aisle are increasing pressure on the SEC to take stricter action against crypto companies. While some senators criticize the industry for manipulation and lack of investor protection, others express concerns about industry migration and regulatory arbitrage. SEC Chair Gensler defends the technology but calls for more funding to police the industry. As the regulatory landscape for cryptocurrencies continues to evolve, it remains to be seen how the SEC will respond to these calls for action.
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