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Financial Services Law Insights and Observations

Brown urges Yellen to coordinate efforts to combat crypto risks

Federal Issues Digital Assets U.S. Senate Department of Treasury Cryptocurrency Fintech

Federal Issues

On November 30, Senator Sherrod Brown (D-OH) sent a letter urging Treasury Secretary Janet Yellen to join forces on drafting legislation that will “create authorities for regulators to have visibility into, and otherwise supervise, the activities of the affiliates and subsidiaries of crypto asset entities.” Recognizing the “troubling risks” within the crypto asset markets and pointing to the recent collapse of a major crypto exchange, Brown suggested that Treasury develop a broad framework for all crypto assets to ensure risks “are contained and do not spillover into traditional financial markets and institutions.” Copying the heads of the SEC, CFTC, Federal Reserve Board, NCUA, CFPB, FDIC, and OCC, Brown encouraged the agencies to enforce existing laws as well as supervisory and regulatory authorities in order to “take on the significant noncompliance with current law among crypto asset firms and minimize, if not eliminate, the opportunities for regulatory arbitrage.” Brown further asked the regulators to “assess the impact of vertical integration in crypto asset markets,” and to coordinate efforts to improve entity and crypto-asset disclosures, market integrity, and transparency.