Crypto Industry ‘Afraid of a Strong SEC’: Senator Elizabeth Warren – Decrypt

On Wednesday, Massachusetts Senator Elizabeth Warren had strong words for the crypto industry, calling on the United States Securities and Exchange Commission to do more to crack down on crypto fraud. In prepared remarks delivered before the American Economic Liberties Project, Warren said industry players were “afraid of a strong SEC.”

“The SEC has filed lawsuits against the crypto celebrity promoters not to disclose their compensation to the public. He went after employees of exchanges like Coinbase for insider trading. He accused crypto scammers of defrauding ordinary investors of millions of dollars,” Warren said, adding that the agency was just getting started.

Various US agencies have waded into crypto waters with the SEC, including the Commodity Futures Trading Commission (CFTC), Federal Trade Commission (FTC), Federal Deposit Insurance Corporation (FDIC), and Department of Justice (DOJ) – not to mention a multitude of state agencies.

While some in the crypto industry would prefer to deal with the CFTC, Warren said she thinks the SEC and its chairman Gary Gensler are best suited for the job. She also commended the agency for blockage Bitcoin exchange-traded funds (ETFs) to hit 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,” Warren said. “It’s the right approach – the SEC has the right rules and the right experience, and Gary Gensler is showing he’s the right leader to get the job done.”

While Warren sings Gensler’s praises, there are plenty in space and even among Senator Warren’s colleagues at Congress who question Gensler’s ability to do his job. The president has been accused of being soft on Sam Bankman-Fried and FTX and what many call regulation by enforcement, arbitrarily choosing who to prosecute and running certain companies. bankrupt.

“The SEC needs to do even more and use the full force of its regulatory powers across the entire crypto market,” Warren said, adding that Congress needs to bolster the agency with new resources and authority to ensure that she can take on the industry at full strength.

Warren pointed to the collapse of several crypto companies, including Celsius, FTX, Travel Digitato land Three-spired capitalin 2022 as another reason the SEC and broader regulation is needed.

Warren also called on environmental agencies to prosecute crypto miners, whom she accused of raising energy costs and polluting the environment. The environmental impact of cryptocurrency mining has long been an issue that regulators cite in calls to ban cryptocurrency.

Warren accused regulators under former President Donald Trump’s administration of giving the premature green light to a crypto market she called “full of junk tokens and unregistered securities, trading posts.” Ponzi mats and schemes, pump and dump, money laundering and sanctions evasion.”

“The consequences of Trump’s weak regulator were no surprise – in 2017 nearly 80% of all initial coin offerings are scams,” she said. “In the following year, investors lost around $9 million a day to crypto scams.”

Warren applauded the SEC’s actions against firms offering “unsafe and unregulated crypto lending products,” pointing to the recently bankrupt firm, BlockFi.

She also accused “crypto-friendly” banks like Silvergate of opening up the banking system to the greatest risk of “crypto meltdowns,” which she said will leave American taxpayers to pick up the sack.

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

In December, Senator Warren targeted self-custody wallets, co-signing a bill called the Digital Asset Anti-Money Laundering Act with fellow U.S. Senator Roger Marshall. The proposed legislation would impose know-your-customer (KYC) requirements on blockchain infrastructure providers and participants operating in the United States. This requirement would extend to decentralized network developers, miners, and validators.

Warren’s remarks preceded a virtual panel discussion titled “Confronting the Crypto Challenge: Learning From a Meltdown.”