06.13.24

Durbin Questions SEC, CFTC Chairs On Crypto At An Appropriations Subcommittee Hearing

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), a member of the Senate Appropriations Committee, today participated in a Senate Appropriations Financial Services and General Government (FSGG) Subcommittee hearing on the Fiscal Year 2025 (FY25) budget, where he questioned U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler and U.S. Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam about the risks of cryptocurrency. 

“Eighty-eight percent of people have heard about crypto.  One in five Americans has invested in it.  Seventy-five percent say they are not confident in the safety and reliability of crypto.  Forty-five percent report their investments have performed worse than they expected, and most do not realize there’s no insurance involved in this, no federal guarantee [meaning] ‘you’re on your own’ when you go into crypto, correct?” Durbin asked.

Chair Gensler responded, “Yes, it’s a field that’s rife with abuse and fraud.  Those tokens that are crypto securities are not properly giving people the disclosure that you get for any other offering.”

Durbin then asked Chair Behnam how the CFTC is dealing with the constantly changing market.

“We have those who worry the CFTC is biting off a lot more than it can chew when it says they want to play in crypto and regulate the industry, at least some aspects of it.  What makes you think you can get into this fast-moving, capacious world and be effective as a regulator?” Durbin asked.

Chair Behnam responded that CFTC’s responsibility is to make observations on commodity markets, “and relay what I observe to [Congress].”  He continued to say that CFTC is one of two market regulators in the U.S. financial system, and it is adequately equipped to oversee the markets they deal with.

Durbin responded by asking, “What makes you think you’re adequately equipped to deal with this market [crypto]?”

Chair Behnam responded that at the moment, CFTC is adequately equipped to oversee the markets it is mandated to oversee, but if it expands to crypto, he believes there needs to be an increase in CFTC’s budget. 

Chair Gensler expanded on the roles of both CFTC and SEC and believes the crypto world is too uncertain for CFTC to handle.  He also said the crypto companies are, “doing a lot of things to put their interests ahead of their customers.”

“So they [crypto companies] are telling their customers ‘go long,’ [but] they are telling their internal investors ‘go short?’” Durbin asked.

Chair Gensler responded, “they may be depending on the company and the day… this is a field that is not serving the public well.”

Video of Durbin’s questions in Committee is available here.

Audio of Durbin’s questions in Committee is available here.

Footage of Durbin’s question in Committee is available here for TV stations.

Durbin continues to raise concerns about cryptocurrency.  Last year, Durbin questioned Chairman Behnam about the collapse of FTX—one of the world's largest crypto trading platforms.  Durbin also previously spoke on the Senate floor highlighting the dangers it poses to personal finances and retirement. 

Durbin, along with U.S. Senators Elizabeth Warren (D-MA) and Tina Smith (D-MN), urged Fidelity Investments to reconsider their decision to allow 401(k) plan sponsors to offer plan participants exposure to Bitcoin, a highly volatile and risky digital asset. Fidelity is one of the largest 401(k) providers with more than 32 million Americans and 22,000 employers who trust Fidelity Investments with their workplace retirement accounts and employer-sponsored plans.  The Senators’ November 2022 letter followed a letter they sent to Fidelity on July 26, 2022.  

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