This Week in US TechREG: SEC, Crypto Community Exchange Warnings; CFPB Wants Credit Reporting Standards in BNPL Sector

This week, the Securities and Exchange Commission (SEC) and the crypto community have been sending warnings to each other: the SEC chair said there was a risk that most crypto assets “are likely to fail,” while Ripple’s general counsel said enforcement actions by the regulator were made with “intents to bully, bulldoze and bankrupt crypto innovation.”

Additionally, U.S. lawmakers are pressing ahead with legislation that would propose the screening of investments in countries seen as adversaries, like China, to protect U.S. technology. Spotify, Yelp and other tech companies are urging Congress to pass an antitrust bill that would curb the power of Big Tech firms like Apple, Meta and Google. 


SEC’s Gensler Says Most Crypto ‘Likely to Fail’ 

SEC Chairman Gary Gensler on Tuesday (June 14) repeated his warnings that the crypto world is full of high-risk investments and that crypto tokens fit the category of assets that must be sold by registered entities. 

“It’s important that these markets have investor protection. It’s a highly speculative asset class. And like most venture capital, most of these projects are likely to fail,” Gensler said at the RFK Human Rights Compass Summer Investors Conference on Cape Cod. His remarks are available online. 

Ripple Lawyer Critical of SEC Push to Regulate Crypto 

The general counsel for Ripple, which provides cryptocurrency and other blockchain-related services for businesses, said in an article published Monday (June 13) that the SEC is trying to destroy the crypto industry. 

“By bringing enforcement actions — or threats of potential enforcement — the SEC intends to bully, bulldoze, and bankrupt crypto innovation in the U.S., all in the name of impermissibly expanding its own jurisdictional limits,” Stu Alderoty said in a piece he penned for Fortune Magazine. 

Crypto Lender Celsius Under Investigation by Several US State Regulators 

Securities regulators in a number of U.S. states are looking into crypto lender Celsius Network’s decision to pause customer redemptions, Reuters reported Thursday (June 16). According to Joseph Rotunda, enforcement director at the Texas State Securities Board, state regulators from Alabama, Kentucky, New Jersey, Texas and Washington are looking into this. 

Commissioner Peirce Pushes Back on SEC Spot Bitcoin ETP Stance 

SEC Commissioner Hester Peirce delivered a speech Tuesday (June 14) at a conference about crypto regulation, where she stepped up her criticisms on how the SEC is not providing adequate solutions to the crypto community. She used the refusal to approve a spot bitcoin exchange-trade product (ETP) as an example. 


CFPB Wants Credit Reporting Standards in BNPL Sector 

The Consumer Financial Protection Bureau (CFPB) published a blog post on Wednesday (June 15) indicating that buy now, pay later (BNPL) lenders and nationwide consumer reporting companies (NCRCs) may need to work more closely together to standardize BNPL payment data to ensure adequate credit reports. 

The CFPB believes that when BNPL payments are provided, it is important to provide both positive and negative data. The agency goes one step further and encourages the industry to adopt standardized BNPL furnishing codes and formats appropriate to the unique characteristics of the product. 

CFPB Seeks Public Comment on Big Bank Customer Service 

The CFPB is asking the public to suggest ways customers can successfully demand “better customer service” from big banks. 

“In today’s Request for Information, the CFPB seeks data about, and consumer experiences with, the obstacles that may prevent people from receiving high standards of customer service and high-quality human interactions with their banks or credit unions,” the agency wrote in a public statement. 

FinCEN Urges Financial Institutions to Combat Scams Targeting Elderly  

The Financial Crimes Enforcement Network (FinCEN) issued an advisory on Wednesday (June 15) to alert financial institutions to the rising trend of elder financial exploitation (EFE). EFE involves the illegal or improper use of an older adult’s funds, property or assets, and is often perpetrated either through theft or scams. The advisory highlights new EFE typologies and red flags since FinCEN issued its first advisory on the issue in 2011. 

Big Tech

Spotify, Yelp, Others Urge Senate to Rein in Big Tech 

Several companies and business groups, including Spotify and Yelp, have written to U.S. senators imploring them to pass a bill that would curb the power of Big Tech firms such as Amazon, Apple, Google and Meta. 

As Reuters reported Monday (June 13), Sen. Amy Klobuchar, D-Minn., and other legislators from both sides of the aisle said they have the votes to approve the bill, which would bar tech companies from favoring their own businesses on their platforms. 

US Lawmakers Push Bill That Could Block FinTech, AI Investments in China 

Congress is pressing ahead with legislation that would propose the screening of investments in countries seen as adversaries, like China, to protect U.S. technology and rebuild critical supply chains, the Wall Street Journal reported. 

The bill, which has bipartisan support, would require American companies and investors to disclose certain outbound investments, and it would create a new interagency panel to review and block investment on national security grounds.

The measure would also require U.S. entities and their affiliates to notify the federal government of activities in China and any “country of concern,” defined as a “foreign adversary” in sectors considered crucial to the supply chain, or if it involves “critical emerging” technologies. 

US, UK Encourage Privacy-Enhancing Innovation to Combat Money Laundering 

The U.S. and U.K. governments announced on Monday (June 13) a new joint initiative to encourage the development of privacy-enhancing technology (PET) that could be used in the fight against money laundering. 

Both countries require financial institutions to detect and report suspicious activities, usually through filings on Suspicious Activity Reports (SARs). However, the sheer volume of data is so vast that government officials sometimes have trouble analyzing them. Additionally, sharing this data with other institutions is not allowed in many instances, given data privacy rules.