Massachusetts Senator Elizabeth Warren is sounding the alarm about how publicly traded companies could essentially bypass US securities laws if a bill to regulate cryptocurrency markets becomes law.
In a Wednesday hearing of the Senate Banking Committee to address crypto market structure legislation, ranking member Warren said she would be in favor of digital asset regulations strengthening the US financial system, but expressed concerns about the Digital Asset Market Clarity, or CLARITY, Act under consideration in the House of Representatives.
The Massachusetts senator suggested that “non-crypto companies” could tokenize their assets to evade regulations enforced by the US Securities and Exchange Commission (SEC).
“Under the House bill, a publicly traded company like Meta or Tesla could simply decide to put its stock on the blockchain and – poof! – it would escape all SEC regulation,” said Warren. “That is a serious problem for our country.”
Warren has also questioned Meta’s potential influence over lawmakers weighing the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, as the company previously announced plans for its own stablecoin.
The two bills, as well as legislation to restrict the development of a US central bank digital currency (CBDC), are expected to be under consideration in the House starting on Monday.
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Crypto conflicts of interest are still a topic of discussion in Congress
The Wednesday hearing marked one of the first times lawmakers in the Senate addressed a crypto market structure bill after its leadership set a September goal to pass the legislation.
Ripple CEO Brad Garlinghouse, former members of the Commodity Futures Trading Commission (CFTC), and others testified, offering their thoughts on Congress’ approach to digital assets.
“Over 55 million Americans participate in the crypto economy, which equates to a $3.4 trillion market cap today,” said Garlinghouse in his prepared testimony. “A smart regulatory framework for crypto market structure is essential to realize that future, and is long overdue.”
Richard Painter, a former chief White House ethics lawyer invited to speak by Warren, added:
“We cannot have the people who are in charge of passing legislation and enforcing legislation, implementing legislation, have conflicts of interest with their official responsibilities. You should be divesting from crypto if you’re going to be regulating crypto.”
Both Warren and Painter specifically called out US President Donald Trump for his ties to the cryptocurrency industry, including through his family-backed business World Liberty Financial and the launch of his memecoin, Official Trump (TRUMP).
The senator accused Republicans of delivering an “industry handout” in response to crypto lobbyists and refusing to address what she called Trump’s “corruption” from the industry.
Bloomberg reported on July 2 that Trump had added at least $620 million to his portfolio in a matter of months due to his crypto investments.
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