US Senator Elizabeth Warren has urged banking and environmental regulators to join forces with the Securities and Exchange Commission (SEC) to fight cryptocurrency fraud. speech January 25th.
Warren said the crypto industry has seen giants such as Celsius and FTX collapse under the weight of their own “fraud, deception and gross mismanagement” over the past 12 months, citing the victimized “honest created an urgency to protect the “investor”.
Warren added that the failures of these cryptocurrency companies have particularly affected black investors and those in the unbanked community.
“Crypto fraud is a big problem, but one we can solve. The solution starts with the SEC.”
Warren said regulators’ approach to crypto regulation is changing under different leadership. She added that under President Donald Trump’s administration, regulators have given the “green light” to junk tokens and unregistered securities, lag pulls, Ponzi schemes, pump and dump schemes, money laundering and sanctions evasion.
But Warren said the SEC “has off to a good start” under the leadership of Gary Gensler.
The senator added that the SEC holds banks and public companies accountable for the risks of managing cryptocurrencies. did it.
The SEC has also stepped up its crackdown on the provision of cryptocurrency lending services, resulting in a record number of enforcement actions over the past year.
The crypto industry is ‘scary’
The SEC is “hardening up” and the crypto industry is lobbying to escape regulatory scrutiny. Warren said:
“…the industry fears a powerful SEC, which is why it spends millions of dollars each year lobbying to escape SEC scrutiny.”
Warren claimed that cryptocurrency players like to “outrun and beat regulators.” But her focus, she said, is to ensure “honest and fair financial markets.”
Warren said applying securities laws to cryptocurrencies was the “right approach.” Cryptocurrencies are no exception to the “same activity, same risk, same regulation” principle, she added.
Praising the SEC’s work under Gensler, Warren said Gensler has proven “a worthy leader to get the job done”. to enforce regulations and curb cryptocurrency fraud, she said.
Even though Warren praises Gensler, many question his abilities. In December 2022, New York State Senator Richie Torres asked the U.S. Government Accountability Office to investigate the SEC’s failure to discover his FTX allegations of fraud before the collapse.
The SEC and Gensler have also come under fire from Minnesota Senator Tom Emer, who said Gensler should pay the price for his “regulatory failure” with Congress. Emmer even claimed that he was aware of Gensler’s fraud on his FTX before FTX collapsed.
Congress, banks and other regulators must join the fight
Warren said Congress needs to ensure that the SEC and other regulators have the necessary resources and authority to regulate “the end-to-end end of the cryptocurrency market.”
She added that environmental regulators such as the Department of Energy and the Environmental Protection Agency should force cryptocurrency miners to disclose their energy use and environmental impact.
Additionally, she said that now that banks like Silvergate have exposed the banking sector to cryptocurrency risks, regulators need to strengthen the sector and insulate it from fraud.
“Strong regulation and enforcement by tough regulators can give the crypto industry an opportunity to prove whether it can deliver on its promises…”