The Securities and Exchange Commission is investigating every U.S. crypto exchange, according to a Senate staffer.
The SEC has taken high-profile public action against crypto exchanges. Coinbase, one of the largest crypto exchanges in the industry, is currently involved in an SEC investigation over allegations of improperly letting Americans trade digital assets as securities. The various exchanges are in different stages of investigation, but they are all under investigation, according to the staffer.
The U.S Commodity Futures Trading Commission has pushed back on the SEC’s pressure on the crypto industry, alleging that the SEC is engaging in “regulation through enforcement,” thus creating tension between the two financial regulatory agencies. While the SEC wants to resolve the tension, Lummis’s staffer said that legislators would get involved if it is not resolved expediently. They also expect Congress to side with the CFTC on the matter.
At least one senior executive at an exchange told Forbes that several exchanges had received Wells notices from the SEC, which are used to inform companies formally that an action is to be brought against them.
Lummis’s staff has been involved in creating legislation to start taking steps toward regulating digital assets like crypto. Lummis co-sponsored the Responsible Financial Innovation Act alongside Sen. Kirsten Gillibrand (D-NY) and introduced the legislation to Congress in June. The bill is being considered by the Finance Committee.
Congress has taken additional actions toward regulating the industry in the last few weeks. Sens. Debbie Stabenow (D-MI) and John Boozman (R-AR) introduced the Digital Commodities Consumer Protection Act of 2022 on Tuesday, giving the CFTC new powers to regulate digital commodities.
The SEC declined to comment.