(Bloomberg) — Senator Elizabeth Warren wants Congress to respond to the explosive growth of cryptocurrencies and urged U.S. regulators to do more with the powers they have to police the market.
“Right now we don’t have any cops on the beat to speak of,” Warren, a Massachusetts Democrat, said in a Wednesday Bloomberg Television interview with David Westin. “So long as it’s an unregulated system, you may be pulling more people in so that they can get cheated and that’s not what we want.”
Warren pointed out that pump-and-dump schemes that are clearly illegal for stocks often go unpunished for tokens because oversight of the industry is unclear. Her comments follow a pledge this week from Securities and Exchange Commission Chair Gary Gensler to bring more crypto enforcement actions, as he said the market is rife with manipulation, while arguing that many tokens fit the definition of securities that fall under existing U.S. laws.Warren also said that it’s important to step up regulation to avoid any possible systemic risks. “The bigger it gets and the more it stays outside the financial system — something goes wrong, there’s a run on crypto or elsewhere in the economy, I don’t want the U.S. taxpayer to be the one that gets called on to back this up.”
The senator added that she does see positives for the technology behind digital tokens in potentially providing financial services for “unbanked” consumers. She said crypto could be a solution for workers who lack bank accounts and now have to pay high fees to cash their pay checks.
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