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Elizabeth Warren: The crypto industry has always been at odds with the US Securities and Exchange Commission.
And it seems to be set for further scrutiny from Massachusetts Senator Elizabeth Warren.
The news
Elizabeth Warren urged the US SEC to do more to combat crypto fraud, sending out a warning to the crypto industry.
Warren had remarks prepared before the American Economic Liberties Project, saying the industry would fear a stronger SEC.
“The SEC has brought enforcement actions against celebrity crypto promoters for not disclosing their compensation to the public,” said Warren.
“It has gone after the employees at exchanges like Coinbase for insider trading. It has charged crypto crooks for defrauding ordinary investors out of millions of dollars.”
Despite their actions, the senator implied that the agency is only warming up.
The agency and allies
Apart from the SEC, other US agencies have treaded into the waters of crypto, including:
- The Commodity Futures Trading Commission (CFTC)
- The Federal Trade Commission (FTC)
- The Federal Deposit Insurance Corporation (FDIC)
- The Department of Justice (DOJ)
Although entities in the crypto industry would rather deal with the CFTC, Elizabeth Warren believes the SEC and chairman Gary Gensler are the best fit for the work.
Warren also lauded the agency’s block of Bitcoin exchange-traded funds or ETFs from going live on the market.
“The commission has been loud and clear that crypto doesn’t get a pass for long-standing security laws that protect investors and ensure the integrity of our financial markets,” the senator said.
“This is the right approach – the SEC has the right rules, and the right experience, and Gary Gensler is demonstrating that he is the right leader to get the job done.”
Doubts
Although Elizabeth Warren has praised Gensler’s progress, there are people who have doubts about his ability to perform his duties, including Warren’s colleagues.
Gary Gensler was criticized for taking it easy on Sam Bankman-Fried and FTX.
Others accused him of what is called regulation by enforcement, wherein he picks out which crypto players to persecute.
Gensler has also been slammed for forcing crypto firms to go out of business.
A necessity
Elizabeth Warren highlighted that the Congress needs to do more in helping the agency, suggesting that resources and authority is needed.
The addition of the two factors would then ensure it has the right arsenal to take on the crypto industry at full strength.
“The SEC needs to do even more and use the full force of its regulatory powers across the entirety of the crypto market,” she explained.
Warren then alluded to the collapse of several crypto players in 2022 as necessary components to the SEC and broader regulation.
The companies include:
- Celsius
- FTX
- Three Arrow Capital
- Voyager Digital
Read also: NFT trade shows positive market sign in early 2023
Environmental aspect
Furthermore, Elizabeth Warren urged environmental agencies to shift their focus on crypto miners.
She explained that miners were driving up energy costs while polluting the environment.
Since the surging popularity of cryptocurrency, the environmental aspect of mining cryptocurrency has become a recurring issue among regulators.
Many have already called for a cryptocurrency ban for its negative impact on the environment.
Presidential intervention
Another entity Elizabeth Warren blames for the flourishing crypto industry is former President Donald Trump’s administration.
She blamed its regulators for prematurely greenlighting the crypto market.
Warren describes the market as being full of the following:
- Junk tokens and unregistered securities
- Rug poles
- Ponzi schemes
- Pumps and dumps
- Money laundering
- Sanctions eviction
“The consequences of Trump’s regulator’s weaknesses were no surprise – by 2017, nearly 80% of all initial coin offerings are scams,” she said.
“The following year, investors lost about $9 million each day to crypto scams.”
Banks
Elizabeth Warren hailed the SEC’s actions against companies that offered unregulated crypto lending products that were deemed dangerous.
She highlighted the recently bankrupt BlockFi.
Warren also slammed banks like Silvergate for making the banking system more prone to crypto collapse, which would leave American taxpayers in the dust.
“It’s the bank regulators’ job to insulate the banking system and taxpayers from the risk of crypto fraud,” said the senator.
“They have the tools, and they need to use them.”
Last month, Warren called out self-custody wallets.
In response, she co-signed the Digital Asset Anti-Money Laundering Act with fellow senator Roger Marshall.
The legislation puts know-your-customer requirements on blockchain infrastructure providers and participants in the United States.
The requirement extends to decentralized networks, miners, and validators developers.
