Senator Elizabeth Warren, a longtime crypto critic, warned recent turbulence in the digital asset space will only continue unless a host of regulators strengthen protections for investors.
“For all their talk of innovation and financial inclusion, crypto industry giants from FTX to Celsius to Voyager are collapsing under the weight of their own fraud, deceit, and gross mismanagement,” she said.
“And when they sink, they take a lot of honest investors down with them,” Warren added during her comments Wednesday at an event hosted by the American Economic Liberties Project and Americans for Financial Reform.
FTX, Celsius, and Voyager all filed for bankruptcy last year as asset prices tanked and the global market capitalization of crypto collapsed by roughly $2 trillion. Federal prosecutors have charged several former FTX executives, including founder Sam Bankman-Fried, with orchestrating one of the biggest financial frauds in US history.
Warren on Wednesday called on regulators, including the Securities and Exchange Commission and banking authorities, to double down on the tools they already have. They need to protect consumers, educate investors and pursue meaningful consequences for bad actors, she said
Crypto mining firms are polluting communities, they’re straining power grids, and they’re driving up utility costs in communities from Texas to New York, she said. “Both the Department of Energy and the Environmental Protection Agency has the authority to require crypto miners to disclose their energy use and their environmental impact.
Warren said the rise of crypto-friendly banks has already opened the traditional banking system to greater risk, “raising the specter of a crypto collapse in which American taxpayers are left holding the bag.
It’s the bank regulators’ job to insulate the banking system and taxpayers from the risk of crypto fraud. They have the tools, and they need to use them.
Finally, Warren said, wherever regulators lack the authority they need, it’s Congress’ responsibility to give the agencies the tools they need to enforce the rules.
“No financial industry should get to write its own playbook you either comply with the law or you face tough consequences for violating it. Crypto is no different.”
