American Senator: Cryptocurrency Needs Stricter Regulation
After a number of cryptocurrency companies sought bankruptcy protection this week, U.S. Senator Elizabeth Warren (D-MA) expressed her worries about bitcoin trading in an interview with Yahoo Finance Live.
She stressed the need for action from the U.S. Securities and Exchange Commission (SEC) and 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 actors that break the rules.
The senator said, “I’ve been sounding the alarm on cryptocurrency and the need for stricter regulations to safeguard consumers and financial stability.
After restricting withdrawals last week, cryptocurrency lender Celsius Network sought bankruptcy protection. Another cryptocurrency lender, Voyager Digital, filed for bankruptcy protection a week earlier. The business attributed the loan default on the failed crypto hedge fund Three Arrows Capital and the contagion in the cryptocurrency markets.
Too many crypto firms have been able to scam customers and leave ordinary investors holding the bag while insiders make off with their money.
Hester Peirce, a commissioner at the SEC, highlighted her worries in May about how the organization has neglected to regulate cryptocurrencies. “We can fight fraud and play a more constructive role in innovation, but we have to get started and get to work,” She said, “So far, I haven’t seen us willing to undertake that task.
SEC Chairman Gary Gensler has come under fire for favoring strict enforcement over other factors in the regulation of cryptocurrencies. The securities regulator said in May that it would practically increase the size of its crypto team under its enforcement division. What investors should anticipate from the SEC in terms of crypto regulatory action was stated by Gensler last week.
Senator Warren has repeatedly urged Gensler to increase crypto oversight. She issued a warning in July of last year about the expanding dangers of cryptocurrency trading and urged the securities watchdog to “use its full authority to address these dangers.” Decentralized financing (defi), according to her, is the riskiest aspect of cryptocurrencies, and she urged regulators to crack down on stablecoins and defi platforms “before it is too late.”
She requested clarification from the financial services business Fidelity Deposits in May over the decision to include bitcoin investments in 401K programs. The Labor Department is worried by Fidelity’s action. Ali Khawar, Acting Assistant Secretary of the Employee Benefits Security Administration of the Labor Department, stated that “We have major issues with what Fidelity has done.”