Senator Elizabeth Warren urged Congress and the Securities and Exchange Commission (SEC) to take a more assertive stance on crypto amid the recent collapse of high-profile firms like Celsius and Voyager.
She said Congress needs to act, but the SEC has a responsibility to use its authorities to put guardrails in place and crack down on crypto players that break the rules. Warren believes now is the time to enforce stronger rules on the crypto sector in an effort to ensure that customer funds are safe and protected. The Senator highlighted that too many crypto firms have scammed customers and left ordinary investors with nothing, whilst insiders take off with their money.
The legislator had written a stern letter to Jeff Kirt, the CEO of Greenidge, in December over the company’s high energy use and carbon emissions. Warren argued that this could potentially harm the environment and raise the cost of electricity for ordinary consumers. Last month, she described the fast-growing decentralized finance (DeFi) sector as “one of the shadiest parts of crypto”. The Senator outlined that regulation is effectively absent from DeFi and it’s where scammers and cheats, and swindlers mix among part-time investors and first-time crypto traders. Warren had also lashed out at Fidelity Investment’s plan to allow customers to allocate Bitcoin to their 401(k) retirement savings accounts. She penned a letter with fellow Democrat Senator Tina Smith to Fidelity CEO Abigail Johnson. They highlighted crypto’s volatility and asked how the company was planning to deal with significant risks like theft, fraud, and loss.
The lawmakers said Bitcoin’s volatility is compounded by its susceptibility to the whims of a handful of influencers. Warren and Smith expressed concern that Fidelity would take these risks with millions of Americans’ retirement savings.