Senator Warren Urges Lawmakers to Recognize the Crypto Market’s “Growing Threats”

Senator Warren implores lawmakers to pay attention to the crypto market’s dangers. Warren outlined five significant concerns that cryptocurrency poses to the established financial system.  The letter is one of Warren’s numerous recent public remarks warning against cryptocurrency.

Senator Elizabeth Warren urged Treasury Secretary Janet Yellen to intervene and address what she perceives as cryptocurrency “risk.” The senator urged Yellen in a letter posted Tuesday to develop an “organized and consistent regulatory framework” for federal agencies to govern digital currencies.

The letter stated:

“As the demand for cryptocurrencies continues to grow, and these assets become more embedded in our financial system, consumers, the environment, and our financial system are under growing threats,”

Warren, an outspoken opponent of several of the largest national banks in the United States and a member of the Senate Banking Committee, emphasized the importance of urgency to Yellen. She pressed Treasury Secretary Steven Mnuchin to intervene through the Financial Stability Oversight Council to ensure a more secure crypto sector.

Warren wrote to Yellen:

“FSOC must move swiftly to use its statutory jurisdiction and regulate the market in order to ensure the safety and stability of consumers and our financial system,”

Warren identifies five primary risks that could arise as a result of the unregulated cryptocurrency industry.

Exposure to hedge funds and other opaque investment vehicles requires transparency

Banks’ risks.

Stablecoins offer unique threats.

Utilization in hacks capable of wreaking havoc on the financial system.

Risks associated with decentralized finance.

The letter was published concurrently with Warren and other US authorities testifying at a crypto-related hearing titled “Cryptocurrencies: What are they good for?” Warren’s letter is just one of several recent attempts by the senator to crackdown on cryptocurrency exchanges.

Crackdowns continues

Senator Warren publicly chastised cryptocurrencies in June. She asserted that digital currencies have failed to live up to their promises and may be detrimental to the old financial system. It was one of her early criticisms, referring to cryptocurrency as a “lousy investment.” Dogecoin was singled out by the senator due to its extreme volatility.

Warren asked the SEC earlier this month to respond to crypto laws by the end of the month. Warren once again cited market volatility as a primary rationale for easing controls on the decentralized market. Additionally, the SEC recently urged crypto tokens to comply with mandated securities requirements. As prominent lawmakers such as Elizabeth Warren continue to speak out on the topic, significant changes to the United States’ regulatory landscape for cryptocurrencies may be on the horizon.

Also Read: Japan Will Conduct A Test Of Ripple’s ODL Money Transfer Service To The Philippines.