Tag: regulate

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Politics

The SEC wants extra energy from Congress to completely regulate crypto, Chair Gensler says

The SEC needs more power from Congress to fully regulate crypto, Chair Gensler says

Gary Gensler

Andrew Harrer | Bloomberg | Getty Images

Securities and Exchange Commission Chairman Gary Gensler said Tuesday that Wall Street’s top regulator needs Congress to grant it additional powers for overseeing a vast and ever-evolving cryptocurrency market.

Speaking about crypto at the Aspen Security Forum, Gensler said the SEC has “taken and will continue to take our authorities as far as they go.”

“Certain rules related to crypto assets are well settled. The test to determine whether a crypto asset is a security is clear,” he said. “There are some gaps in this space, though: We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector.”

Gensler, who previously taught classes about blockchain and other financial technology at the Massachusetts Institute of Technology, has asked lawmakers to grant his agency the legal authority to oversee crypto exchanges.

He said many of the crypto coins were trading like assets and should fall under the purview of the SEC, which already has significant authority over digital assets.

Despite his deep knowledge of blockchain and cryptocurrencies, Gensler has made it clear that he intends to take a hands-on approach when it comes to new financial technologies. Capitol Hill has for months held hearings on how best to monitor the nascent market, now worth trillions, amid violent price swings and rapid growth.

Sen. Elizabeth Warren, for example, last week wrote to Treasury Secretary Janet Yellen to urge her to bulk up oversight efforts.

Warren, a member of the Senate Banking Committee and a longtime critic of the nation’s largest banks, pressed the Treasury secretary to use her powers on the Financial Stability Oversight Council to bring about a safer crypto market.

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“FSOC must act quickly to use its statutory authority to address cryptocurrencies’ risks and regulate the market to ensure the safety and stability of consumers and our financial system,” the Massachusetts Democrat wrote in a letter to Yellen. “As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment, and our financial system are under growing threats,” she added.

Chief among regulators’ concerns about crypto are its susceptibly to fraud and market manipulation.

The Federal Trade Commission reported earlier this year that consumers reported losing more than $80 million to crypto scams between October and March, with many of those losses stemming from underhanded scammers targeting small investors on social media, the FTC said.

“The American public is buying, selling, and lending crypto on these trading, lending, and DeFi [decentralized finance] platforms, and there are significant gaps in investor protection,” Gensler said. “Make no mistake: To the extent that there are securities on these trading platforms, under our laws they have to register with the commission unless they meet an exemption. Make no mistake: If a lending platform is offering securities, it also falls into SEC jurisdiction.”

Gensler on Tuesday did not offer comment on the potential for approving a bitcoin exchange-traded fund, a pending decision that many in the crypto market are anxiously awaiting.

Investors are closely following the status of an application by VanEck to list shares of its Bitcoin Trust on the Chicago Board of Exchange’s BTZ Exchange. Regulators said in a letter dated June 16 that they would take additional time to seek comments from the public.

Bitcoin was last seen trading at $38,200, but has been volatile in recent months and in late July dipped below $30,000.

Republican SEC Commissioner Hester Peirce, known for advocating somewhat easier regulation of digital assets, told CNBC last month that she’s frustrated with how slow the regulator has been to approve such an ETF.

Denying bitcoin ETF applications not only runs the risk of a double standard but also may leave thousands of investors with few, more-dangerous alternatives, Peirce said.

“The complications of not approving [an application] become stronger, because people are looking for other ways to do the same kinds of things that they would do with an exchange-traded product,” she said. “They’re looking at other types of products that aren’t as easy to get in and out of, they’re looking at companies, perhaps, that are somehow connected with bitcoin or crypto more broadly.”

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Health

Democrats push FDA to manage poisonous metals in child meals

Democrats push FDA to regulate toxic metals in baby food

Democrats urge FDA to regulate toxic metals in baby food after research finds high levels.

Chris Tobin | DigitalVision | Getty Images

Top Democrats are urging the FDA to regulate toxic metals in baby formula after a Congressional investigation found metals like arsenic, lead, and cadmium to be found in far higher amounts than permitted in bottled water and other products.

Sens. Amy Klobuchar, D-Minn. And Tammy Duckworth, D-Ill. As well as the representatives Raja Krishnamoorthi, D-Ill. And Tony Cardenas, D-Calif., Told CNBC that they are asking regulators to limit the levels of toxic heavy metals in baby food.

The Food and Drug Administration does not currently set limits for heavy metals in baby food, particularly for arsenic in rice grain. The agency regulates other toxins in consumer products such as lead, arsenic, and cadmium in bottled water.

The four Democrats said Thursday they had drafted laws that would tighten regulations on baby food safety and sent them to FDA staff for technical review. However, lawmakers want the FDA to use their existing regulator to take immediate action.

“Through our legislation and FDA regulations, we will ensure that the baby foods we put on the market are safe and that our children are safe,” Krishnamoorthi said in a statement. “I am proud to work with my colleagues, along with the FDA, stakeholders and health professionals across the country, to develop major reforms.”

An FDA spokeswoman said the agency takes exposure to toxic metals in food “extremely seriously” and that the agency is reviewing the results of the Congressional investigation. She added that “The FDA has not commented on whether it has received requests for technical assistance regarding the legislation, but we would look forward to working with Congress on the matter.”

Rep. Raja Krishnamoorthi, D-Ill., During the House Oversight and Reform Committee hearing titled Protecting the Timely Delivery of Mail, Medicines and Postal Ballots on Monday, Aug. 24, 2020, in the Rayburn House office building.

Tom Williams | CQ Appeal, Inc. | Getty Images

A subcommittee of the House Committee on Oversight and Reform, chaired by Krishnamoorthi, released the results of its 15-month investigation in February. It used data from four companies – Nurture, Hain Celestial Group, Beech-Nut Nutrition, and Gerber, a unit of Nestle – that responded to the subcommittee’s requests for information on testing guidelines and test results for their products.

The research found that “baby food companies weren’t looking for parents and young children the way we all expected – instead they knowingly sold us tainted products,” said Krishnamoorthi.

Hain said at the time that the investigation “did not reflect our current practices,” adding that the company’s internal standards “meet or exceed current federal guidelines.”

Gemma Hart, a spokeswoman for Nurture, told the New York Times at the time that their products were safe and that the metals were only present in “trace amounts”. Beech-Nut said Thursday that the company is “committed to continuously improving its internal standards and testing processes as technology and knowledge evolve.” Dana Stambaugh, a spokeswoman for Gerber, said the company is taking steps to minimize metals in its products.

Three other baby food companies – Walmart, Sprout Organic Foods, and Campbell Soup – did not provide all of the information requested. At the time the investigation was published, Campbell said its products were safe and cited the lack of FDA standards for heavy metals in baby food.

A Walmart representative told Reuters at the time that private label product suppliers must meet their own specifications, “which for baby and toddler foods means the levels must meet or fall below the limits set by the FDA.”

Sprout did not immediately respond to CNBC’s request for comment.

“Like parents across America, I was horrified to learn that trusted baby food brands knowingly sell products that are high in toxic lead, arsenic, mercury and cadmium,” Rep. Cardenas said Thursday. “I urge the FDA to use their existing agencies to take immediate regulatory action.

The investigation found that heavy metals are naturally found in some grains and vegetables, but added that levels can be increased if manufacturers add other tainted ingredients to baby food. According to the report, companies rarely test their products for contamination before sending them to stores.

“It is unacceptable that, despite parents’ efforts to protect their children, some leading baby formula manufacturers have launched products that expose children to dangerous toxins,” Klobuchar said in a statement. “This legislation will protect children and ensure a healthy start by holding manufacturers accountable for removing toxins from infant and toddler foods.”