06 Dec 2022
A cryptocurrency bill proposed by Elizabeth Warren could give the SEC the majority of regulatory power
After the FTX cryptocurrency exchange fell, the senator called for new rules to control the cryptocurrency industry.
According to sources close to her, Senator Elizabeth Warren is working on a comprehensive cryptocurrency bill that would give the Securities and Exchange Commission the majority of the regulatory authority over cryptocurrencies.
“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.
According to Semafor's details, which “could change,” Warren's office is looking into matters relating to cryptocurrencies, such as taxation, regulation, the environment, and national security.
The senator called for new rules to control the cryptocurrency industry after the collapse of the cryptocurrency exchange FTX. Warren's ideas included 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.
Warren recently urged the SEC and other federal regulators to combat cryptocurrency fraud more vehemently and urged Congress to increase funding for law enforcement organizations and financial regulators to close funding gaps.
It is important to remember that the US lacks federal regulatory authority, making it challenging to regulate cryptocurrencies there.
Bitcoin is governed as a commodity by the Securities and Exchange Commission (SEC), as an exchange-traded fund by the Commodity Futures Trading Commission (CFTC), and as property by the Internal Revenue Service.
Elizabeth Warren has previously worked on a bill to regulate cryptocurrencies. She unveiled one in March to control cryptocurrency and punish Russia simultaneously.
In essence, the bill was designed to put pressure on Russia economically and force blockchain businesses to choose between the two.
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