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‘Congress Needs to Act’ on Crypto Says US Senator Elizabeth Warren

The industry's current insolvency issues have prompted Senator Warren to call for a more assertive stance from authorities.

3 min read
Elizabeth Warren. Image: Maverick Pictures/Shutterstock

Democratic Senator Elizabeth Warren is calling on Congress and the SEC to take a more assertive stance with crypto, in light of recent high-profile insolvencies from lenders like Celsius, Vauld, Voyager, and BlockFi. 

Warren told Yahoo Finance on Monday that “Congress needs to act, but the SEC has a responsibility to use its authorities to put guardrails in place and crack down on crypto actors that break the rules.”

The Massachusetts Senator said she’s been “ringing the alarm bell on crypto” and recommends enforcing “stronger rules” on the sector to ensure customer funds are protected. 

 

She added that “too many crypto firms have been able to scam customers and leave ordinary investors holding the bag while insiders make off with their money.”

Monday’s comments are just the latest in what has become a highly critical stance on all things crypto.

Warren on mining, DeFi and Bitcoin retirement plans 

In December last year, Warren wrote a stern letter to Jeff Kirt, the CEO of Bitcoin mining company Greenidge, raising concerns over the operation’s “high energy use and carbon emissions,” which, she argued, could harm the environment and raise the cost of electricity for ordinary consumers.  

Later that month, speaking at a Senate Committee on Banking, Housing, and Urban Affairs, Warren called the fast-growing decentralized finance (DeFi) sector “one of the shadiest parts of crypto.” 

 

She elaborated that DeFi “is where the regulation is effectively absent and—no surprise—it’s where the scammers and the cheats and the swindlers mix among part-time investors and first-time crypto traders.”

In May this year, Warren criticized Fidelity Investment’s plan to allow customers to allocate Bitcoin to their 401(k) retirement savings accounts. 

Together with Democrat Senator Tina Smith of Minnesota, Warren penned a letter to Fidelity CEO Abigail Johnson pointing to crypto’s volatility and asking her how Fidelity plans to deal with “significant risks such as fraud, theft, and loss."

 

The lawmakers also said, “Bitcoin’s volatility is compounded by its susceptibility to the whims of just a handful of influencers.” They singled out Tesla CEO Elon Musk, whose “tweets alone have led to Bitcoin value fluctuations as high as 8%.”

“We are concerned that Fidelity would take these risks with millions of Americans’ retirement savings,” reads the letter. 

Opposing Warren, a group of Republicans drafted a bill later that month to prevent the U.S. Labor Department from restricting the type of investments that 401(k) account holders can select.

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