US Senator Elizabeth Warren said that “too many crypto companies have been able to scam customers and leave ordinary investors to hold the bag while insiders run off with their money.” She stressed the need for tougher rules, urging the Securities and Exchange Commission (SEC) and Congress to take action on crypto regulation.
US Senator Says Crypto Needs Tougher Regulation
US Senator Elizabeth Warren (D-MA) expressed her concerns about investing in cryptocurrency in an interview with Yahoo Finance Live last week after several crypto companies filed a claim. bankruptcy protection.
Calling on the United States Securities and Exchange Commission (SEC) to act, she pointed out:
Congress needs to act, but the SEC has a responsibility to use its powers to put in place guardrails and crack down on crypto players who break the rules.
“I sounded the alarm about crypto and the need for tougher rules to protect consumers and financial stability,” the senator added.
Last week, the crypto lender Celsius Network filed for bankruptcy after freezing withdrawals. A week before, another crypto lender, digital travel, filed for bankruptcy protection. The company cited contagion in crypto markets and the bankrupt crypto hedge fund Capital of the Three Arrows‘s ready to default as the reasons.
Warren pointed out:
Too many crypto firms have been able to scam customers and let ordinary investors hold the bag while insiders run off with their money.
SEC Commissioner Hester Peirce expressed concern in May that the securities watchdog had dropped the ball on the regulation of cryptocurrencies. “We can tackle fraud and we can play a more positive role on the innovation side, but we have to get there, we have to get to work… I haven’t seen us ready to do that work until present,” she nodded.
SEC Chairman Gary Gensler has been criticized for taking a law enforcement oriented approach to crypto regulation. In May, the securities watchdog said it was almost double the size of the cryptography unit of its execution division. Last week, Gensler described what investors can expect from the SEC on the crypto regulatory front.
Senator Warren has pressed Gensler to step up crypto oversight on several occasions. In July last year, she warned of the growing risks of cryptocurrency trading, calling on the securities regulator to “use its full authority to deal with these risks. She also said that decentralized finance (defi) is the most dangerous part cryptocurrency, urging regulators to crack down on stablecoins and defi platforms “before it’s too late”.
In May she asked for answers from financial services firm Fidelity Investments regarding the company’s decision to allow bitcoin investments in 401K plans. Fidelity’s decision has troubled the Ministry of Labor. “We are very concerned about what Fidelity has done,” said Ali Khawar, acting assistant secretary for the Department of Labor’s Benefits Security Administration. The senator has also repeatedly criticized bitcoin environmental impact.
What do you think of US Senator Elizabeth Warren’s comments? Let us know in the comments section below.
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