The senator demanded new regulations to govern the crypto industry after the collapse of the crypto exchange FTX.
Senator Elizabeth Warren is working on a sweeping cryptocurrency bill that would give most cryptocurrency regulatory authority to the Securities and Exchange Commission, according to sources close to her.
“As Senator Warren has already said publicly, she’s working on crypto legislation and believes that financial regulators, including the SEC, have broad existing authority to crack down on crypto fraud and illegal money laundering,” Alex Sarabia, a Warren spokesperson, said in a statement to Semafor.
Warren’s office is investigating crypto-related issues, including taxation, regulation, climate, and national security, according to details by Semafor, which “could change.”
Following the collapse of the crypto exchange FTX, the senator demanded new regulations to govern the crypto space.
Among Warren’s proposals were the following:
- Ensure brokers and crypto exchanges comply with certain regulatory requirements, such as providing audited financial statements and mandating capital requirements similar to banks.
- Securing customer deposits so they are never combined with company assets and keeping them separate so they can’t be used to finance other investments if a company goes bankrupt.
To address these, Warren recently urged the SEC and other federal regulators to fight crypto fraud more aggressively and called on Congress to provide more funding to law enforcement agencies and financial regulators to close regulatory gaps.
Worth noting that cryptocurrencies are difficult to regulate in the US due to a lack of federal regulatory authority. Bitcoin is regulated as a commodity, by the Commodity Futures Trading Commission (CFTC), in the exchange-traded fund category by the Securities and Exchange Commission (SEC), and in the property category by the Internal Revenue Service (IRS),
It is not the first time Elizabeth Warren is working on a crypto regulatory bill. She introduced one in March to regulate cryptocurrency and sanction Russia simultaneously. In essence, the bill was meant to force blockchain businesses to choose between the two countries and exert economic pressure on Russia.
However, following that, Warren was met with criticism from crypto enthusiasts and non-crypto advocates alike.