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Elizabeth Warren: The US Securities and Exchange Commission and the cryptocurrency business have never gotten along.
Elizabeth Warren, a senator from Massachusetts, is poised to scrutinize it further.
The news
Elizabeth Warren issued a warning to the cryptocurrency industry and encouraged the US SEC to take stronger action against cryptocurrency fraud.
In prepared remarks for the American Economic Liberties Project, Warren claimed that the sector would be afraid of a more powerful 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.”
The senator hinted that the agency is just getting started despite its activities.
The agency and allies
Other US government entities, outside the SEC, have dabbled in cryptocurrencies, including:
- The Commodity Futures Trading Commission (CFTC)
- The Federal Trade Commission (FTC)
- The Federal Deposit Insurance Corporation (FDIC)
- The Department of Justice (DOJ)
Elizabeth Warren thinks the SEC and chairman Gary Gensler are the ideal candidates for the job, despite the fact that companies in the cryptocurrency business would prefer to cooperate with the CFTC.
The agency’s decision to prevent Bitcoin exchange-traded funds from coming live on the market was praised by Warren as well.
“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
Elizabeth Warren has applauded Gensler’s development, while some others, including Warren’s coworkers, have concerns about his capacity to carry out his responsibilities.
Gary Gensler received criticism for being too lenient with FTX and Sam Bankman-Fried.
Others accused him of choosing particular crypto players to target for prosecution, a practice known as regulation by enforcement.
Gensler has furthermore come under fire for driving cryptocurrency companies out of business.
A necessity
Elizabeth Warren emphasized the need for the Congress to assist the agency more and said that both power and funding were required.
The combination of the two elements would guarantee that it has the necessary tools to engage the crypto business at full force.
“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 continued by implying that the SEC and other regulatory bodies were forced to act when a number of cryptocurrency players collapsed in 2022.
The companies include:
- Celsius
- FTX
- Three Arrow Capital
- Voyager Digital
Read also: DOJ shuts down platform for criminal affairs
Environmental aspect
Elizabeth Warren also asked environmental organizations to concentrate more on cryptocurrency miners.
She described how mining increased energy costs and harmed the environment.
Since cryptocurrencies have grown so popular, regulators frequently raise the environmental impact of cryptocurrency mining.
A cryptocurrency prohibition has previously been demanded by many due to its harmful effects on the environment.
Presidential intervention
Elizabeth Warren also attributes the booming cryptocurrency market to the previous government of President Donald Trump.
She accused its officials of hastily approving the cryptocurrency market.
According to Warren, the market is crowded with 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 applauded the SEC’s efforts against businesses that provided dangerous, unregulated crypto loan products.
She drew attention to the recently insolvent BlockFi.
Warren criticized Silvergate and other financial institutions for increasing the risk of a crypto collapse, which would impoverish American taxpayers.
“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.”
Warren criticized self-custody wallets last month.
She and Senator Roger Marshall co-signed the Digital Asset Anti-Money Laundering Act in response.
The law requires blockchain infrastructure suppliers and users in the United States to identify their customers.
Decentralized networks, miners, and validators developers are all subject to the requirements.
