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US Senator Elizabeth Warren has been a leading critic of all things crypto, issuing repeated warnings and sponsoring a proposed cryptocurrency bill that could bring big changes to the industry if passed.
Elizabeth Warren is a U.S. senator representing Massachusetts after winning re-election to serve a second term in 2018. Before joining the Senate, Senator Warren worked at the Consumer Financial Protection Bureau (CFPB), a regulatory agency she helped establish following the 2008 financial crisis. Recently, Senator Warren has established herself as a leading crypto critic. She feels that an unregulated or under-regulated crypto sector will cause more harm than good to the economy.
The lawmaker is best known for her economic plan, which envisioned significant changes to the financial and economic system. Her idea was to implement a wealth tax on some of the wealthiest families in America, rebuild the middle class, and break up big tech companies like Apple, Amazon, and Google.
Senator Warren even said she wanted to run for the presidency in 2020 to push for “big, structural change” which was necessary for the U.S. However, she dropped out of the race and endorsed Joe Biden for president.
|Crypto Opinion||👎 “Cryptocurrency is an environmental disaster”|
|Profession||U.S. Senator, Massachusetts|
|Net Worth||$12 million|
|Country of Residence||United States|
Elizabeth’s Thoughts On Cryptocurrency
Senator Warren has been vocal about the fast-growing crypto market, and she emphatically maintains that there’s a need to protect investors and taxpayers from “bad actors” and curb the use of crypto to commit crimes:
- One month after the FTX scandal in November 2022 that led to the loss of customer funds, Senator Warren is collaborating with Senator Marshall of Kansas to introduce new regulations to stop money laundering through digital assets. If the Warren-Marshall bill, the Digital Asset Anti-Money Laundering Act, is enacted, the crypto industry will be regulated under existing financial rules. It means crypto players must meet Know-Your-Customer (KYC) requirements, and banks will have to report transactions linked to un-hosted wallets.
- In September 2022, Senator Warren and other members of the Senate Banking Committee sent a letter to Meta, pressing them to reveal the steps they are taking to tackle crypto scams since many scammers are using Meta sites to defraud users.
- In August 2022, Senators Warren, Sanders, Dick Durbin, and Sheldon Whitehouse asked the Comptroller of the Currency to issue new comprehensive guidelines on how banks should engage in crypto activities. In the letter to the Office of the Comptroller of the Currency (OCC), the lawmakers claimed that banks were being exposed to too much risk.
- In July 2022, Senator Warren criticized Wall Street Giants at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, saying that these firms benefit from crypto scams at the expense of investors.
- In May 2022, Senator Warren addressed a letter to Fidelity CEO Abigail Johnson questioning the idea to let people add bitcoin to their 401(k) accounts. She was concerned that such a move would jeopardize the retirement savings of millions of Americans.
- In a letter sent to Treasury Secretary Janet Yellen in March 2022, Senator Warren and Senators Reed, Brown, and Warner voiced concerns about the potential use of digital currencies in sanction evasion schemes.
- In December 2021, while attending another Senate Banking, Housing, and Urban Affairs Committee hearing, Elizabeth Warren expressed worries about the risks posed by stablecoins to consumers and the economy.
- In December 2021, Senator Warren wrote to Greenidge Generation Holding Inc., a company that mines bitcoin. She raised concerns about the huge power usage in crypto mining, leading to higher electricity bills for consumers.
- In September 2021, while speaking during the Senate Banking, Housing, and Urban Affairs Committee hearing, attended by Gensler, the SEC chair, Senator Warren urged regulators to play their role in closing regulatory gaps for an inclusive financial system.
- Senator Warren wrote to Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), in July 2021. In her letter she asks to get answers on the SEC’s role in cryptocurrency regulation.
In June 2021, speaking at an interview on Bloomberg, Elizabeth Warren referred to the crypto market as the “Wild West.” She said that crypto assets are not an ideal medium of exchange and are a lousy investment that’s also disastrous for the environment.
How Is Elizabeth Warren Tied To The Crypto Industry?
After spending two years on oversight investigations as a member of the Senate Banking, Housing, and Urban Affairs Committee, Elizabeth Warren is now pushing for the proper regulation of the crypto market. In a letter to Janet Yellen, the Treasury Secretary, Senator Warren expressed concerns that crypto poses threats to national security, financial stability, climate, and consumer and investor protections.
Senator Warren’s letter reveals vital details about the risks associated with crypto, and the following is a breakdown of these concerns:
- Crypto Poses Risks To National Security – Criminals, rogue states, and other individuals may use digital assets to settle cross-border payments and dodge sanctions. For example, the government of North Korea raises funds by executing crypto hacks, which allows the regime to evade economic sanctions.
- Crypto Mining Carries Environmental Risks – The amount of energy used to mine Bitcoin has gone up almost four times between early 2019 and mid-2022. Crypto mining activities have also led to an increase in carbon dioxide emissions.
- Crypto Could Threaten Financial Stability – Regulators have concluded that the proliferation of crypto may pose systemic risks to the financial system and the economy. Furthermore, the trading of cryptocurrencies on centralized exchanges could increase contagion risk.
- Crypto Market Lacks The Necessary Protection For Consumers And Investors – While the crypto industry argues that crypto offers a great chance of financial inclusion for consumers locked out of the traditional financial system, there has been evidence showing that billionaires and Wall Street are the primary beneficiaries of this new technology. Predatory advertising is widely used in the industry, promising unsuspecting customers massive returns on capital invested, failing to point out the risks of investing in crypto products.
After these findings, Elizabeth Warren stressed the need to create a safer crypto market. The Massachusetts Democrat urges the Financial Stability Oversight Council (FSOC) to utilize its statutory authority and tame the risks posed by an under-regulated crypto industry.
- Helped form the Consumer Financial Protection Bureau (CFPB)
- Elected Senator twice, becoming the first woman to represent Massachusetts in the Senate
- Published her memoir “A Fighting Chance” in 2014