Chris Coons Presses SEC Chairman On Holding Crypto Exchanges To Same 'Rigorous Standards' As Banks

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During a Senate Appropriations Committee hearing on Tuesday, Sen. Chris Coons (D-DE) questioned SEC Chairman, Paul Atkins on the SEC's oversight of cryptocurrency exchanges.

Transcript

00:00Let me yield back to the chairman. Thank you. Thank you, Ranking Member Reed. I'll now turn

00:04to Senator Coons. Thank you, Chairman Haggerty and Ranking Member Reed and to Chair Atkins.

00:09Thank you for being here and for your service. I appreciated finally receiving more details on

00:15the president's budget requests, and I hope more broadly this is not the new normal for this

00:20administration. We need timely cooperation in order to draft our appropriations bills.

00:25I appreciate your appearance here today and the directness and clarity of your presentation.

00:31Taking a look at your proposed budget, it does include some cuts, particularly of concern to

00:36me is the Enforcement Division, and as you were just discussing with Ranking Member Reed, the number

00:42of career officials who've taken buyouts or have been pushed to retire. How many people have left

00:47the enforcement division over the last six months? Well, so there's been a nationally for enforcement

00:5715 percent decrease, so it's right at the average for the agency overall. And again, you know,

01:05we have a deep well of experience, and not just here in Washington, but throughout the regions,

01:12and so we're very competent people. And as we look at, you know, going forward, our request is stable

01:22as to, you know, previous years. And so, you know, where there are gaps, we'll fill them in. And,

01:28you know, I have confidence that we'll be able to do the job that we need to do with what we have.

01:36President Trump signed an executive order that paused all future investigations and enforcement

01:42actions under the Foreign Correct Practices Act for at least nine months, if I'm not mistaken. No,

01:47for 180 days. Forgive me. I recognize the supplies to the DOJ, but the SEC also plays a critical role in

01:54helping implement FCPA. You're authorized to share information obtained with the DOJ if they uncover

02:00potential criminal activity. I'm troubled that the president in this action seems to be

02:06deciding which laws will be enforced and which laws will have their enforcement suspended.

02:11Is the SEC, under your leadership, still prioritizing enforcement of the FCPA? And has the SEC offered

02:18any evidence to the DOJ that's been rejected due to that executive order?

02:23Well, I can't speak to any particular, you know, investigation or activity.

02:30I understand you can't speak to any particular investigation, but you certainly can report

02:33on whether or not that executive order has resulted in the SEC stopping all investigation or

02:39enforcement of the SCPA. Well, many of these cases involve many different aspects of the securities

02:46laws. So just that one section. Familiar with it. Yeah. And so, so to my knowledge, you know,

02:52nothing has been directly affected, but, but, you know, I'm happy to get back to you on that.

02:59I'd appreciate it. Earlier, you said the core mission of the agency you now lead is to protect

03:05investors against those who would lie, cheat or steal, which I would agree with you is in some

03:09ways the really the core mission. The FCPA, although some have decried it as putting American

03:15business at a competitive disadvantage, I think actually puts us at a competitive advantage

03:19because foreign governments, foreign companies know that they can count on American business to

03:25secure its business advantage around the world fair and square, not through underhanded ways or not

03:31through bribery. So I certainly would appreciate your following up with me on what you see as the

03:36enforcement trajectory for the FCPA. Last cryptocurrency is a very pressing issue, an issue you have a lot of

03:44experience with. And I come at this topic through the lens, of course, of my home state, which has long

03:49been an established financial services and banking center. You've endorsed allowing crypto exchanges

03:55to handle both traditional securities and crypto in one entity. If exchanges like Coinbase that are

04:02crypto exchanges are permitted to offer their services, as well as more traditional things, stocks and

04:08bonds, how do you ensure they're held to the same rigorous standards as more traditional banks and

04:14investment firms? Well, so that's part of our task now to try to come up with regulations that make sense

04:24for the industry and that allow for innovation. And so our task force, you know, is holding roundtables

04:32and we'll come out with a report here in the next couple months. And we'll come up with proposed rules

04:41of the road to, you know, to, and take comments, you know, in that regard, and then go ahead and go to,

04:51you know, go through with a rulemaking process. Well, as you go through that process, I just urge you to

04:56hold to that core understanding of the role of the SEC to protect crypto investors from being harmed

05:02by fraud and market manipulation. The traditional financial services industry is subject to

05:07comprehensive regulation. And I think there's an understandable anxiety on their part about facing

05:13a direct competition from a financial sector that is lightly regulated or not at all. And while I

05:20recognize the value of innovation, and of making sure that the United States remains on the cutting

05:25edge of innovation and financial services, I think that also has to be balanced with protecting investors,

05:31and thus retaining the confidence that global investors have in the credibility of the American

05:35capital markets. And you have a unique role. I think your background and experience will be

05:40relevant. I very much look forward to staying in touch on this, because I think this crypto task

05:45force you've put together is going to be critical. Last question, do you believe the SEC needs any new

05:50statutory authorities to regulate crypto and carry out the recommendations of the task force?

05:54Well, thank you for that. I it would be great to be undergirded by statute. But in the meantime, I think we

06:05have enough authority to under the under the securities laws to be able to come out with regulations in this

06:14regard. But it's always best to have that that firm foundation. Agreed. Thank you, Mr. Chairman. Thank you, Mr. Chairman.

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