Treasury Secretary Janet Yellen listens during an open session of a Financial Stability Oversight Council meeting at the Department of the Treasury on April 21, 2023, in Washington.
Alex Wong—Getty Images
Just hours after the Securities and Exchange Commission raised questions about the future of crypto in the U.S. by suing Binance and Coinbase, Treasury Secretary Janet Yellen said she’s “very supportive” of the agency using its enforcement powers.
In an interview on CNBC on Wednesday, Yellen pointed out that under U.S. law the SEC and the Commodity Futures Trading Commission have tools at their disposal to protect consumers and investors.
“I’m supportive, very supportive, of seeing those agencies use the tools they have,” she told CNBC.
Although she wouldn’t comment specifically on the Binance or Coinbase suits to CNBC, Yellen added that the agency’s actions were “certainly appropriate.”
The Treasury Secretary also said that after President Joe Biden issued an executive order on digital assets last year, the department outlined in reports “a number of risks,” some of which could threaten consumers and investors. In October, the Financial Stability Oversight Council chaired by Yellen said that crypto-asset activities “could pose risks to the stability of the U.S. financial system if their interconnections with the traditional financial system or their overall scale were to grow without adherence to or being paired with appropriate regulation, including enforcement of the existing regulatory structure,” according to a summary of a larger report on the issue.
Although she voiced support for regulators, Yellen also said there were still gaps in how crypto is regulated that lawmakers must address.
“I see some holes in the system where additional regulation, I think, would be appropriate, and we would like to work with Congress to see additional legislation passed,” she told CNBC.
Following the collapse of FTX, crypto-related bills in Congress have stalled, including a revamped version of a bipartisan crypto bill sponsored by Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.).
On Friday, the chairmen of the House Financial Services and Agriculture committees released a draft bill intended to bring some clarity and structure to crypto market regulation. By Monday, the legislation was overshadowed by the SEC’s lawsuits, Fortune reported.
If the SEC succeeds against Coinbase, it could bring about a major change to how cryptocurrencies are used in the country and significantly alter the company’s future in the U.S.
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