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Senator Elizabeth Warren Tells Treasury Secretary Yellen to Reign in Crypto Now
Senator Elizabeth Warren, a member of the Senate Banking Committee, has referred to as on the Secretary of the Treasury Janet Yellen to reign in cryptocurrency – now.
In a letter despatched to Yellen, Senator Warren advised the Secretary to make use of the Monetary Stability Oversight Council (FSOC) to mitigate the danger of the “extremely unstable cryptocurrency market” and create a complete strategy to regulating digital belongings.
Warren stated:
“Because the demand for cryptocurrencies continues to develop and these belongings change into extra embedded in our monetary system, shoppers, the atmosphere, and our monetary system are below rising threats. FSOC should act rapidly to make use of its statutory authority to deal with cryptocurrencies’ dangers and regulate the market to make sure the protection and stability of shoppers and our monetary system.”
Yesterday, in a Senate Banking Committee listening to, Senator Warren slammed cryptocurrency as a threat to the complete monetary system. Couching her criticism below the guise of investor safety, Warren referred to as the cryptocurrency ecosystem “awful.”
“As an alternative of awful banks [crypto] places management within the fingers of shadowy builders.”
Senator Warren is below the idea that the normal monetary system has change into intertwined with digital belongings “such that disruption within the cryptocurrency market may unfold all through the monetary sector.”
Within the letter addressed to Secretary Yellen, Senator Warren outlined areas the place she believes there’s threat surrounding cryptocurrency:
- Publicity to Hedge Funds and Different Funding Automobiles that Lack Transparency
- Threat to Banks
- Distinctive Threats Posed by Stablecoins
- Use in Cyberattacks that Can Disrupt the Monetary System
- Dangers from “Decentralized Finance” (DeFi)
The letter provides:
“FSOC ought to evaluation this matter and decide whether or not it’s acceptable to make the most of its statutory authority to include the systemic dangers posed by the rising cryptocurrency market. The longer that america waits to adapt the right regulatory regime for these belongings, the extra seemingly they are going to change into so intertwined in our monetary system that there could possibly be probably severe penalties if this market comes below stress.”
Earlier this month, Warren advised SEC Chairman Gary Gensler that the securities regulator was not adhering to its mission of fundamental investor protections with regard to crypto exchanges.
Senator Warren is named one of the crucial liberal members of the US Senate. She has lengthy been a critique of cryptocurrency and has pushed again on monetary innovation in addition to attacking massive banks.
Elizabeth Warren FSOC Crypto Letter 07.26.2021