Sen. Elizabeth Warren (D-MA) warns that the United States needs to regulate the cryptocurrency industry better to avoid a future collapse like what happened to FTX.
Warren, a vocal critic of crypto, argued on Tuesday that the industry needed to be more heavily regulated after FTX’s collapse caused massive economic ripples throughout the crypto markets.
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The Democratic Senator noted how the industry had been used for money laundering and insider trading, two areas that financial regulators did not have power over within crypto to date.
“FTX’s implosion should be a wake-up call,” wrote Warren in the Wall Street Journal. “Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure — before the next crypto catastrophe takes down our economy.”
Warren called on financial regulators such as the Securities and Exchanges Commission and the Treasury Department to treat crypto assets in the same way that other financial transactions are treated. She noted how the technology’s anonymity had been used by criminals and enemies of the United States to launder money. Warren also noted the economic issues related to insider trading.
The crypto industry has been under additional scrutiny from lawmakers and investors in the wake of FTX’s collapse. The company’s fall has had significant negative impacts on several major crypto tokens, including Bitcoin and Ethereum.
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FTX founder Sam Bankman-Fried is scheduled to appear before Congress in December, where he will have to testify about his handling of customer assets.
John Ray, the man who took over for Bankman-Fried after the company’s failure, said that the state of the company was worse than past corporate failures in the past, including the collapse of Enron.
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