Elizabeth Warren rallies crypto critics to defend the SEC's record post-FTX
TL;DR At a recent event, Senator Elizabeth Warren and other members of the panel called for tighter regulation on the crypto industry. They argued that the SEC should take the lead in regulating the industry and that FedNow, a real-time payments system by the Federal Reserve, should be rolled out soon to undercut the argument from the crypto industry that digital assets can speed up transactions. They also mentioned the smear campaign against SEC chair Gary Gensler, who has been criticized for not taking action on FTX.
Sen. Elizabeth Warren, D-Mass., pushed for tighter regulation on the crypto industry on Wednesday in an event hosted by the American Economic Liberties Project called "Confronting the Crypto Challenge: Learning From a Meltdown."
“The solution starts with the SEC," said Warren, D-Mass., in her keynote. "The SEC has a long history of fighting exactly the battles that we now face.”
The event assembled a who's who of Washington, D.C.'s most notable crypto critics, ranging from legal scholars to progressive policy wonks.
“I would ban crypto,” said panelist Hilary Allen, a law professor at American University.
The SEC's legacy on crypto took center stage, particularly the effectiveness of Chair Gary Gensler. “There is a smear campaign against Gensler right now from the industry trying to blame Gensler for what the industry did," said Matt Stoller, a director of research at the American Economic Liberties Project.
Gensler's action — or, for critics, inaction — on FTX in particular emerged as a critical battleground for the future of crypto regulation almost as soon as FTX went down. The event's participants came down decidedly on the side of Gensler. “Gary Gensler is demonstrating that he is the right leader to get the job done,” Warren said.
Event participants also pushed for the rollout of a real-time payments system by the Federal Reserve, which has faced repeated delays. Such a system, if functional, would undercut the argument from the crypto industry that digital assets can speed up transactions.
One-time federal banking nominee and current Cornell Law professor Saule Omarova said the new project, known as FedNow, “would relieve a lot of the actual market need for faster payments and would eliminate a lot of claims for the use of all of these crypto payments systems.”
Omarova's fellow panelists, including Allen and Stoller, agreed that they wanted FedNow to launch sooner rather than later, saying that the crypto industry had pointed to a legitimate problem of payments access as an advertising point without solving the problem.
Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.