Crypto Industry ‘Fears Powerful SEC’: Senator Elizabeth Warren

Massachusetts Senator Elizabeth Warren issued strong words to the crypto industry on Wednesday, calling on the U.S. Securities and Exchange Commission to do more to combat cryptocurrency fraud. In a speech before the American Economic Liberties Project, Warren said industry insiders were “frightened of a powerful SEC.”

“The SEC has taken enforcement action against high-profile crypto promoters for not publicly disclosing their rewards. Employees of exchanges such as Coinbase are targeted for insider trading. We have prosecuted a cryptocurrency scammer who swindled millions of dollars out of his home,” Warren said, adding that the agency is still in its infancy.

Various US agencies, including the Commodity Futures Trading Commission (CFTC), Federal Trade Commission (FTC), Federal Deposit Insurance Corporation (FDIC), and Department of Justice (DOJ), are stepping into the crypto waters with the SEC. It refers to many national institutions.

While some in the crypto industry prefer to trade with the CFTC, Warren believes the SEC and its chairman, Gary Gensler, are best suited for the job. of exchange-traded funds (ETFs) from hitting the market.

“The Commission is making it loud and clear that cryptocurrencies will not pass longstanding security laws that protect investors and ensure the integrity of financial markets,” Warren said. “This is the right approach. The SEC has the right rules, the right experience, and Gary Gensler has proven to be the right leader to get the job done.”

Warren admires Gensler, but there are many in the field, and even among Senator Warren’s colleagues in Congress, they question Gensler’s ability to do the job. -Fried and FTX are optimistic about what many call law enforcement regulation, arbitrarily picking and choosing who to go after, and have been accused of putting several companies out of business .

“The SEC needs to do more and make the most of its regulatory powers across the crypto market,” Warren said, adding that Congress should strengthen the SEC with new resources and powers to ensure the SEC can work. I added that it should be Do your best for the industry.

Warren pointed to the bankruptcies of several crypto companies in 2022, including Celsius, FTX, Voyager Digital and Three Arrow Capital, as another reason for the need for the SEC and broader regulation.

In December, Senator Warren, along with US Senator Roger Marshall, co-signed a bill called the Digital Assets Anti-Money Laundering Act aimed at self-custody of wallets. The proposed law would impose Know Your Customer (KYC) requirements on blockchain infrastructure providers and participants operating in the United States. This requirement extends to developers, miners, and validators of decentralized networks.

Warren also called on environmental agencies to go after cryptocurrency miners she accused of driving up energy costs and polluting the environment. The environmental impact of cryptocurrency mining has long been an issue that regulators have raised in their calls to ban cryptocurrencies.

Warren said regulators under former President Donald Trump’s administration have created a virtual bank that she called “full of junk tokens and unregistered securities, ragpole and Ponzi schemes, pump and dump, money laundering and sanctions evasion.” He accused the currency market of giving the green light prematurely. ”

“The results of Trump’s regulatory weakness weren’t surprising.By 2017, almost 80% of all initial coin offerings were fraudulent.The next year, investors were making about $9 million a day in crypto fraud. I lost the

Warren praised the SEC’s action against companies offering “dangerous and unregulated crypto lending products,” referring to the recently bankrupt BlockFi.

She also accused “crypto-friendly” banks like Silvergate of opening up the banking system to increase the risk of a “crypto collapse.”

“It is the job of banking regulators to insulate the banking system and taxpayers from the risk of cryptocurrency fraud,” she said. “They have the tools and they should use them.”