U.S. Sen. Sherrod Brown (D-Ohio), whose chairmanship of the Senate Banking Committee gives him power over crypto’s congressional destiny, issued a call to arms to regulators on Thursday, demanding that they use whatever authority they currently have over digital assets to improve market transparency and protect the investors putting their money into the sector.
Brown sent a letter to the heads of the Treasury Department, Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), calling for them to address the dangers of the industry.
“I ask that your agencies assess their authorities and evaluate how we can build on our existing disclosure guardrails to effectively target the deficiencies we have observed in digital asset tokens and digital asset platforms,” Brown wrote in the letter to Treasury Secretary Janet Yellen, SEC Chair Gary Gensler and CFTC Chair Rostin Behnam.
He contended that the industry isn’t going to police itself.
“Ultimately, inadequate disclosures persist because opacity serves sponsors, executives, and other crypto industry insiders,” Brown argued. “It is far easier to profit when customers are left in the dark. That’s why the crypto companies resist real transparency and try to force Americans to accept the paltry, self-serving disclosures endemic to the industry.”
The senator had already praised the SEC’s enforcement crackdown on crypto in a Senate hearing earlier this week. This latest sentiment is inarguably harsh for the crypto sector from the lawmaker whose legislative intentions have been murky, at best. While the House of Representatives has cleared consequential crypto bills for floor votes, the Senate has accomplished little more than introducing and reintroducing legislation that still awaits committee action.
The crypto industry and regulators have strongly encouraged lawmakers to come up with rules tailored for its unique products and assets. Brown’s words would suggest a need for new rules, even if Congress hasn’t yet provided a roadmap to guide the agencies in writing them. With this note, Brown isn’t explicitly suggesting any legislation that he’s getting behind, just that “Congress can work to provide Americans with the information they need.”
Meanwhile, Gensler at the SEC has been executing his belief that existing securities laws govern crypto, leaving virtually every cryptocurrency business out of compliance and vulnerable to his agency’s enforcement team.