US Senator Warren pushes SEC for failures of the crypto exchange, high transaction fees, financial inclusion-regulation
US Senator Warren pushes SEC for failures of the crypto exchange, high transaction fees, financial inclusion-regulation
At the hearing of the US Senate banking committee on Tuesday, Senator Elizabeth Warren asked the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, to strengthen the supervision of cryptocurrency. She addressed several problems that associated with cryptocurrency that could harm small investors.
Senator Elizabeth Warren says: "There are a whole list of problems with crypto"
Senator Elizabeth Warren interviewed the chairman of the US stock exchange supervisory authority SEC, Gary Gensler, at the hearing of the Senate banking committee on Tuesday on several questions about cryptocurrency.
The Senator from Massachusetts began to find out that "a market value of $ 400 billion disappeared within a few hours last Tuesday". She then pointed out that "several of the largest crypto exchanges had failures, the customers stopped from making leaks or transactions" when the prices of the cryptocurrencies fell.
When asked how this affects small private investors, "who don't have a lot of money", Warren described a hypothetical situation. "Let's say I took out the last splitter of my savings last Monday. I went to the crypto tours Coinbase. I bought ether $ 100. Then on Tuesday morning I woke up that the market looked like it was sinking and I thought I was selling better now," she said and added:
But when I tried to sell, Coinbase, the stock exchange, was below. So, Mr. Gensler, I was able to do something to get my money out?
Gensler replied: "Not at a federal authority because they have not yet registered with us [Coinbase], even though they have dozens of token who can be securities."
Senator Warren then described another hypothetical situation. "Instead of buying Ether on Coinbase last Monday, I decided to use this $ 100 to buy a new, cool token-we call it 'new' Coin '-that was hyped on Twitter," she said. "New coin is only available on a 'decentralized' crypto exchange, so I had to pay a fee of about $ 20 to the crypto miner for the purchase ... then of course I woke up on Tuesday morning and the market was full."
She asked Gensler how much she would have to pay on the stock exchange to sell her coins and quickly get back into dollars, and explained:
How much should I pay to get out of the defi on Tuesday to sell my coins. Would I have had to pay a second fee of $ 20 or might I have had to pay more?
The Sec chairman promptly replied: "I don't know because it will be all in the user agreement." He added that many platforms are "only decentralized" and quoted: "There is a usage agreement. There is something you do with this platform. There is a governance token.
During the SEC chairman, he did not know which fee a certain stock market place is raising, Senator Warren brought the network fees up.
"We know some of the fees from last Tuesday. The fee for the exchange between two crypto tokens in the Ethereum network was more than $ 500, obviously much more than $ 100 that I originally tried to act," she called:
The question I have is, given these high, predictable fees, small investors could easily be trapped and completely wiped out.
Senator Warren then claimed that cryptocurrency was not a way to financial inclusion. "Chairman Gensler, supporters say that the cryptoma markets are only concerned with financial inclusion. But people who are most susceptible to the economy must most likely take off their money when the market falls. Does that sound like a way to financial inclusion?"
Gensler replied: "It is a highly speculative asset class. It does not sound like the path you mentioned."
Warren continued:
There is a whole list of problems with crypto: unreliable technology, fraud, devastating effects on the climate. But high, unpredictable fees can make crypto trading really dangerous for people who are not rich.
she concluded: "The regulatory authorities have to reinforce to close gaps in crypto regulation", and emphasized: "Chairman Gensler, I expect you and the SEC to take on a leading role in achieving this."
What do you think of what Senator Elizabeth Warren said to Sec-Chairman Gensler? Let us know in the comment area below.
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