WASHINGTON — Sen. Elizabeth Warren, D-Mass., said the Securities and Exchange Commission should double down on its scrutiny on digital assets, while applauding the agency's existing effort to insulate the banking system from the crypto industry.
Warren alluded to an accounting bulletin issued by the agency that requires most SEC registrants that hold crypto assets for their clients record that risk on their balance sheets as a liability. For many banks, especially large ones, this
"The SEC has helped to keep crypto volatility out of the banking system by holding banks and other public companies responsible for the risks of custodying crypto assets," she said.
In her remarks, given at an event hosted by the American Economic Liberties Project and Americans for Financial Reform, Warren praised SEC Chairman Gary Gensler's attention on crypto, but called on Congress to allow the agency more resources to enforce existing securities laws, and to grant it more authority to better police the more opaque corners of the crypto market.
"In the pockets of this market where regulators may not have the authority they need, Congress should give the tools to get the job done," she said. "We can see the risks to financial stability, but in the dark recesses of the crypto world, the threat to our national security is growing."
Warren's support of the SEC is notable given a push by some firms, including FTX, to support legislation that would give the Commodity Futures Trading Commission more control over crypto markets. That's a move that some crypto skeptics — including Warren — believe would result in more lenient rules and enforcement.
Sens. Debbie Stabenow, D-Mich., chair the Senate Agriculture Committee, and John Boozman of Arkansas, the panel's ranking Republican, sponsored a bill to that end, with input from FTX's disgraced founder Sam Bankman-Fried.
Warren also called on banking regulators to redouble their scrutiny of cryptocurrency, but stopped short of making specific recommendations on how they should do so.
"Our banking regulators are also part of this fight," she said. "Already, crypto-friendly banks
In particular, Warren pointed to the obligations of banks to root out things like money laundering, and said that fraud-rife crypto companies should do the same.
"It's the bank regulators' job to insulate the banking system and taxpayers from the risk of crypto fraud," she said. "They just need to use them."
