Sen. Brown pushes for ‘consistent, comprehensive’ crypto disclosures in letter

Sen­a­tor Sher­rod Brown, D‑OH, is con­cerned about the “trou­bling lack of cus­tomer-fac­ing” dis­clo­sures in crypto. 

The leg­is­la­tor wrote a let­ter addressed to Trea­sury Sec­re­tary Janet Yellen, Secu­ri­ties and Exchange Com­mis­sion Chair Gary Gensler, and Com­mod­i­ty Futures Trad­ing Com­mis­sion Chair Ros­tin Behnam. 

“I urge you to use exist­ing tools to strength­en trans­paren­cy and hold bad actors account­able,” he wrote.

Brown hopes that, by address­ing the Trea­sury, CFTC and SEC, the US can “build on our exist­ing dis­clo­sure guardrails to effec­tive­ly tar­get the defi­cien­cies we have observed in dig­i­tal asset tokens and dig­i­tal asset plat­forms.” He’s also request­ed that the agen­cies work hand-in-hand with Con­gress as leg­is­la­tors push cryp­to-focused leg­is­la­tion forward.

“Some of my col­leagues in Con­gress have pro­posed mere­ly apply­ing lim­it­ed dis­clo­sure require­ments to dig­i­tal asset tokens. This would be a pro­found mis­take. We can­not water down the high stan­dards that have pro­tect­ed investors and sup­port­ed busi­ness­es for decades,” Brown said.

Brown specif­i­cal­ly push­es for “con­sis­tent, com­pre­hen­sive, and accu­rate dis­clo­sures in cryp­to markets.”

He cites the fail­ures of FTX and Cel­sius as spe­cif­ic fail­ures, say­ing that despite the two col­laps­es, “cryp­to firms have tak­en no mean­ing­ful steps to improve their trans­paren­cy, leav­ing cus­tomers vulnerable.”

The let­ter from Brown comes as Con­gress heads back to Wash­ing­ton to vote on mul­ti­ple cryp­to bills. One such bill, the Finan­cial Inno­va­tion and Tech­nol­o­gy for the 21st Cen­tu­ry Act, has bipar­ti­san sup­port and seeks to estab­lish joint rule­mak­ing pow­ers between the CFTC and the SEC. 

As Block­works pre­vi­ous­ly report­ed, it would also clar­i­fy how dig­i­tal assets are clas­si­fied, specif­i­cal­ly stat­ing that an invest­ment con­tract does not nec­es­sar­i­ly make a token a secu­ri­ty, with the bill’s co-spon­sors pub­lish­ing a fact sheet that push­es for most tokens to be clas­si­fied as tokens rather than securities.

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