Elizabeth Warren Publicly Defends SEC Policy After FTX Crisis

Key Points:

• Senator Elizabeth Warren cautioned that the recent instability in the world of digital assets would only persist until several authorities enhance investor safeguards.
• Warren urged regulators, such as the SEC and financial agencies, to strengthen their use of the instruments at their disposal.
• She added that they must safeguard consumers, inform investors, and seek out significant repercussions for irresponsible behavior.

Senator Elizabeth Warren, a steadfast opponent of cryptocurrencies, said that current turmoil in the market for digital assets would only persist until several regulators enhance investor safeguards.

In an event titled Confronting the Crypto Challenge: Learning From a Meltdown, organized by the American Economic Liberties Project on Wednesday, Warren argued for more regulation of the crypto company. The gathering included the most eminent crypto opponents in Washington, D.C., from legal experts to progressive policy experts.

“For all their talk of innovation and financial inclusion, crypto industry giants — from FTX to Celsius to Voyager — are collapsing under the weight of their own fraud, deceit and gross mismanagement. And when they sink, they take a lot of honest investors down with them,” she said.

The crash of FTX in November set off a chain reaction that is now spreading across the highly unregulated and opaque crypto marketplaces. On Wednesday, Warren urged regulators, such as the Securities and Exchange Commission (SEC) and banking agencies, to strengthen their use of the instruments at their disposal. According to her, they must work to safeguard customers, inform investors, and pursue “meaningful consequences” for wrongdoers.

“The SEC has a long history of fighting exactly the battles that we now face.”

The history of the SEC towards cryptocurrencies was highlighted, notably the efficiency of Chair Gary Gensler. Director of research of the American Economic Liberties Project, Matt Stoller, stated:

“There is a smear campaign against Gensler right now from the industry trying to blame Gensler for what the industry did.”

Participants at the event pressed for the Federal Reserve to launch its real-time payments system, which has had many delays. If such a system were to work, it would refute the claim made by the cryptocurrency sector that digital assets can speed up transactions.

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