Senator Elizabeth Warren wants Congress to respond to the fast expansion of cryptocurrencies and has asked US authorities to do more with the market-policing tools they have.
In an interview with Bloomberg TV, Warren also voiced concern about Federal Reserve Chairman Jerome Powell, implying that she was hesitant to re-appoint the central banker due to his perceived soft attitude to regulation.
“Right now, we don’t have any officers on the beat to speak of,” Warren, a Democrat from Massachusetts, said in a Bloomberg Television interview with David Westin on Wednesday. “As long as it is an uncontrolled system, you may be attracting more individuals in order for them to be scammed, which is not what we want.”
Warren said that pump-and-dump operations, which are plainly unlawful for stocks, sometimes go unpunished for tokens due to a lack of industry regulation. Her remarks follow Securities and Exchange Commission Chair Gary Gensler’s vow this week to pursue more crypto enforcement proceedings, claiming that the market is riddled with manipulation and asserting that many tokens match the definition of securities that fall under existing U.S. regulations. Warren also stated that increased regulation is necessary to avert any potential systemic concerns. “The bigger it becomes and the longer it stays outside the banking system – something goes wrong, there’s a run on crypto or somewhere in the economy – I don’t know what happens.
The senator went on to say that she sees benefits for the technology underlying digital tokens in terms of potentially offering financial services to “unbanked” individuals. She believes cryptocurrency may be a solution for workers who do not have bank accounts and must presently pay hefty fees to cash their wages.
Commenting on the crypto market, the senator compared the asset class to certain markets ahead of the 2008 financial crisis, saying she doesn’t want “the U.S. taxpayer to get called on” to backstop another failing financial market.