U.S. Sen. Sherrod Brown (D-OH) is urging federal financial regulators to strengthen transparency in cryptocurrency markets.
Brown said that the current lack of full disclosure about digital assets products and platforms leaves the public vulnerable to fraud and scams. This stands in stark contrast to the comprehensive disclosure required in traditional markets.
“As they examine crypto tokens, consumers and investors need to be able to assess risks, avoid fraud, and understand conflicts of interest. The vacuum of accurate, investment-useful information, however, has led to the proliferation of outright scams, platforms vulnerable to manipulation by informed insiders, and hacks that drain customer accounts. The damage is staggering — just last year, nearly $10 billion was lost to crypto scams or stolen in hacks,” Brown, chair of the Senate Committee on Banking, Housing, and Urban Affairs, wrote in a Sept. 14 letter to regulators.
The letter was addressed to Treasury Secretary Janet Yellen, Securities and Exchange Commission Chair Gary Gensler, and Commodity Futures Trading Commission Chair Rostin Behnam.
“Ultimately, inadequate disclosures persist because opacity serves sponsors, executives, and other crypto industry insiders. 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,” Brown added.
Brown asked the agency chiefs to assess their authorities and evaluate how they can build on the existing disclosure guardrails to target the deficiencies observed in digital asset tokens and digital asset platforms.
“Finally, I urge you to use existing tools to strengthen transparency and hold bad actors accountable,” Brown concluded.