Treasury Secretary Yellen asks US financial authorities to talk about GameStop affair
Janet Yellen wants to talk to SEC, CFTC and Fed about recent developments involving GameStop, Robinhood and Reddit.
The new US Treasury Secretary wants to gather the three major regulators of US financial markets to discuss the GameStop and Robinhood affair.
According to a report in the Wall Street Journal on 2 February, recently-elected Treasury Secretary Janet Yellen plans to meet this Thursday with the leaderships of the Securities and Exchange Commission (SEC), the Futures and Options Trading Commission (CFTC) and the US Federal Reserve (Fed) to discuss the issue.
The Securities and Exchange Commission (SEC) had already announced that it Immediate Edge would investigate possible market manipulation in the case. The involvement of the Commodity Futures Trading Commission (CFTC) and the Federal Reserve (Fed) suggests that the talks will probably go beyond Robinhood, Reddit and GameStop.
The markets in general will be the most important item
Although the stock market was primarily affected by the developments surrounding the trading platform, the social network and the video game retailer’s security, the hype also spilled over into the crypto market and the commodities market. However, it is probably not only for this reason that the other two financial authorities will still be involved, because most likely the influence of social networks on the markets in general will be the most important item on the agenda.
In addition to the SEC, the American parliament has already joined the discussion after the trading platform Robinhood temporarily suspended the purchase of GameStop shares (GME) last week. Many politicians see this as an attack on small investors.
Ridgway Barker of law firm Withers tells Cointelegraph that Robinhood may have been in a bind as Robinhood. A predicament that could be resolved in the future through the use of crypto and blockchain.
„I hope for a world where we can trade ‚tokenised‘ securities and no longer need a broker as an intermediary,“ as Barker explains to this effect. Tokenisation in this context means packaging a stock into a crypto token, allowing it to be traded on a blockchain. As Barker explains, „Robinhood had no choice and had to stop trading. But if there is no longer a need for a middleman and we can trade trader to trader directly, then a lot of these systemic problems fall away.“
The Treasury has not yet responded to an enquiry from Cointelegraph at the time of going to press.