SEC Must Take Lead on Crypto Fraud to Protect Investors: Warren
• Elizabeth Warren urged banking and environmental regulators to fight crypto fraud along with the Securities and Exchange Commission (SEC).
• The failure of crypto firms has especially impacted Black investors and people from underbanked communities.
• The senator said that with Gary Gensler at the helm, the SEC has held banks and public companies responsible for the risks of cryptocurrency custody.
U.S. Senator Elizabeth Warren recently spoke out about the importance of strictly regulating the crypto industry, saying that the solution to crypto fraud begins with the SEC. Warren stated that during the past 12 months the crypto industry has seen giants like Celsius and FTX collapse under the weight of their own „fraud, deceit, and gross mismanagement,“ creating an urgent need to protect „honest investors“ that are victimized.
The senator noted that the failure of these crypto firms has especially impacted Black investors and people from underbanked communities, and that the crypto industry is „scared“ of a strong SEC, spending millions to escape oversight. Warren asserted that the regulators‘ approach to crypto regulation has varied under different leadership, noting that during the administration of President Donald Trump, regulators gave a „green light“ to junk tokens and unregistered securities, rug pulls, Ponzi schemes, pump-and-dump schemes, money laundering, and sanctions evasion.
However, Warren said with Gary Gensler at the helm, the SEC „has made a good start,“ noting that the SEC has held banks and public companies responsible for the risks of cryptocurrency custody. It has also prevented the launch of a cryptocurrency ETF, Warren said, though she believes the SEC should also take a more active role in stopping crypto fraud. The senator suggested that the SEC should take a hard stance on firms that use their own tokens to create incentives to invest, and should also increase transparency and disclosure requirements for crypto firms.
In addition, Warren urged banking and environmental regulators to fight crypto fraud along with the SEC, and said that the regulators should take a closer look at the environmental impact of crypto mining. Warren concluded by saying that fighting crypto fraud is a problem that can be solved, and that the solution starts with the SEC.