Sherrod Brown, chairman of the Senate Committee on Banking, Housing and Urban Development, has urged several crypto companies to disclose consumer and investor protection information online.
On December 23, Brown sent notices to Coinbase, Gemini, Paxos, TrustToken, Binance.US, Circle, Center and Tether, in which he said through 3. The Senator said investors “may understand the complexities and unique characteristics and terms of each stablecoin don’t appreciate “as crypto platforms don’t always give users what they need. Uses the same protection as someone buying coins direct from the issuer.
“I have significant concerns about the non-standard terms that apply to exchanges of certain stablecoins, how those terms differ from traditional assets, and what terms they have,” Brown said. ”
The announcement asks for background information on the purchase, exchange and minting of stablecoins as well as the number of tokens in circulation and how often users exchange them for US dollars. Browns notifies Coinbase, Heart and Circle and requests information on USD Coin (USDC), Gemini on GUSD, Paxos on Pax Dollar (USDP), TrustToken on TrueUSD (TUSD) and Tether on USDT. He added that companies should identify market conditions that would make it difficult, if not impossible, to redeem stablecoins for fiat.
Thanks very much @SenSherrodBraun for a letter on the important topic of how stablecoin issuers protect consumers. I look forward to hearing from you and working with you to ensure consumers are adequately protected. https://t.co/RWWmI0erOA
– Jeremy Allaire (@jerallaire) November 24, 2021
Brown’s request from crypto companies follows a report by the President’s Working Group on Financial Markets that found that stablecoin issuers in the United States are under “reasonable federal control,” like banks. The group argues that legislation is “urgently needed” to address the risks posed by stablecoins.
Related: The scourge of stablecoins: regulatory hesitation could hinder acceptance
The US regulators previously took action against stablecoin issuers such as Tether and Bitfinex for allegedly not always backing their USDT with reserves. Corporations are required to pay $ 18.5 million in damages to New York State and submit regular reports on their reserves. Once closed, Tether reported a large portion of its reserves, including commercial paper.