At the U.S. Senate Banking Committee meeting, Sen. Elizabeth Warren called on the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, to step up oversight of the cryptocurrency. He raised several issues he associates with cryptocurrency that could hurt small investors.
Senator Elizabeth Warren says “there is a complete list of problems with cryptography”
U.S. Sen. Elizabeth Warren questioned U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler about several cryptocurrency-related issues at the Senate banking committee session Tuesday.
The Massachusetts senator began by noting that last Tuesday, “within hours, $ 400 billion in market value disappeared.” He then noted that as cryptocurrency prices fell, “several of the larger cryptocurrencies exchanges were disrupted, preventing customers from making withdrawals or transactions.”
Questioning how this affects small retail investors, “who don’t have a lot of money to lose,” Warren described a hypothetical situation. “Let’s say that last Monday I took the last savings out of my savings. I went to the Coinbase cryptocurrency exchange. I bought ether worth $ 100. Then I woke up on Tuesday morning, I saw that the market seemed to be starting to close and I thought it would be better to sell right now, ”he said, adding:
But when I tried to sell, Coinbase, the exchange, had fallen. So, President Gensler, was there anything I could do to get my money out?
Gensler responded, “Not in a federal agency because they [Coinbase] they have not yet registered with us, although they have dozens of tokens that can be securities ”.
Senator Warren described another hypothetical situation. “Instead of buying ether on Coinbase last Monday, I decided to put in that $ 100 to buy a fresh new testimonial (let’s call it‘ new currency ’) that was being posted on Twitter,” he detailed. The new currency is only available in a “decentralized” cryptocurrency exchange, so to buy it I had to pay a fee, about $ 20, to the cryptocurrency miners who processed the transactions … So of course , I woke up on Tuesday morning and the market was closing. “
He asked Gensler how much he would have to pay the exchange to sell his coins and quickly return in dollars, stating:
How much should I pay to go out of challenge on Tuesday to sell my coins. Should I have paid a second fee of $ 20 or should I have paid even more?
The SEC president responded quickly, “I don’t know, because everything will be in agreement with the user.” He added that many platforms “are only decentralized in name,” and stated that “there is a user agreement. There is something you do with this platform. There is a governance token. There are usually some fees.”
While the SEC president said he is unaware of what rate a certain change charges, Sen. Warren raised network rates.
“We know some of the quotas from last Tuesday. The fee to switch between two cryptographic tokens on the Ethereum network was more than $ 500, obviously much more than the $ 100 I was trying to change in the first place, “he exclaimed, noting:
The issue I have is that in the face of these high and predictable rates, small investors could get bogged down and end up in their entirety.
Senator Warren then stated that cryptocurrency is not a path to financial inclusion. “President Gensler, proponents say crypto markets are about financial inclusion. But the most economically vulnerable people are the ones most likely to withdraw their money faster when the market falls. It sounds like a path to financial inclusion? “
Gensler responded, “It’s a highly speculative asset class. It doesn’t seem like the path you mentioned.”
Warren continued:
There is a whole list of problems with cryptography: unreliable technology, scams, devastating climate impact. But high and unpredictable rates can make cryptocurrency trading really dangerous for people who are not rich.
He concluded: “Regulators need to be strengthened to address the regulatory shortcomings of cryptocurrencies,” noting, “President Gensler, I hope you and the SEC will play a leading role in achieving this.”
What do you think of what Senator Elizabeth Warren said to SEC President Gensler? Let us know in the comments section below.
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