Investor advocacy groups urged SEC chair Gary Gensler to more tightly regulate the cryptocurrency industry in a letter on Monday.
The letter signed by Americans for Financial Reform Education Fund, the Consumer Federation of America and others, specified stablecoins, crypto lending and exchanges as key areas in need of more regulation.”Without significant regulatory guidance, the digital asset marketplace has been born and grown into a Wild West,” the groups wrote in their letter. “It is urgent for the Commission and other federal financial regulators to enforce the law to better protect investors and improve the integrity and stability of the digital asset markets.”The groups wrote that rules governing securities had been in place for decades and urged the SEC not to undermine such regulations and their investor protections by creating “carve-outs” for certain crypto assets.They also singled out stablecoins USDC and Tether as assets that appeared to be securities similar to money market funds, and that thus could pose significant risks to investors.The letter reiterates many of the same positions that Gensler himself has espoused in testimony before Congress and in other settings, and arrives as the SEC and other regulators have started to pursue more actions against the crypto industry.
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UPDATE (Sept. 20, 21:15 UTC): Updated with additional details on the content of the letter in the third and fourth bullet points.