Democratic Senator Sherrod Brown sent a letter to US Treasury Secretary Janet Yellen, US Securities and Exchange Commission (SEC) Chairman Gary Gensler and US Commodity Futures Trading Commission (CTFC) Chairman. Rostin Behnam. The politician spoke about significant financial losses suffered by cryptocurrency investors. According to Brown, crypto investors lost about $10 billion last year alone as a result of fraud or hacker attacks.
As an example, Brown cited a common scheme for withdrawing liquidity (rug pull), when project organizers artificially generate interest in a token by declaring its real usefulness. After luring investors into the scam, the scammers disappear with their funds. Brown did not ignore the bankrupt crypto lender Celsius, which, according to the senator, distorted facts about finances and the number of users.
The senator explained this by the lack of transparency in industry regulation. So Brown called on lawmakers and regulators to take more steps to protect investors from misconduct. A good place to start is by requiring disclosures to be more consistent, complete and accurate, Brown said. Without these measures, users remain vulnerable.
“When exploring tokens, traders and investors should be able to assess risks. This will prevent conflicts of interest and fraud,” the letter states.
Recently, Senator Brown praised the SEC for its enforcement actions against crypto companies. The politician believes that strict requirements for industry companies “cleanse” the industry from fraudsters and protect investors.
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