Elizabeth Warren Says ‘Wild West’ of Cryptos Needs Regulation

Senator Elizabeth Warren (D-MA) questions Alex Azar (not pictured) during a Senate Health, Education, Labor and Pensions Committee hearing on his nomination to be Health and Human Services secretary on Capitol Hill in Washington, U.S., November 29, 2017. REUTERS/Yuri Gripas - RC16615E8900

KEY FACTS:

  • Elizabeth Warren called for a crackdown on “environmentally wasteful cryptocurrencies” like bitcoin on Wednesday.
  • The Democratic Senator from Massachusetts made the comments in a Senate Banking Subcommittee hearing.
  • Warren said “cryptocurrencies like bitcoin are terrible for the environment” and that now is the time to act.

U.S. Senator Elizabeth Warren on Wednesday called on U.S. policymakers to directly deal with the issues she argues is presented by the growing use of cryptocurrency, while supporting a Federal Reserve-backed digital currency.

Democrat Warren, a prominent Wall Street critic and consumer advocate, said cryptocurrency’s promise of boosting everyday Americans has failed to materialize, and instead the government must act to address a what she views as the problems of crypto currency.

“Cryptocurrency has created opportunities to scam investors, assist criminals, and worsen the climate crisis,” she said at a congressional hearing. “The threats posted by crypto show that Congress and federal regulators can’t continue to hide out, hoping that crypto will go away. It won’t. It’s time to confront these issues head-on.”

Warren called it a “terrible currency” that’s really only useful to “criminals” and speculative investors she said in a Senate subcommittee hearing on the possibility of a central bank digital currency. 

“The crypto world currently has no consumer protection, none. As a result, honest investors and people trying to put aside some savings are at the mercy of fraudsters,” she said during her opening statement. She added that “crypto has become a haven for illegal activity,” echoing concerns about the role bitcoin and others may play in cyberattacks, like the one on Colonial Pipeline’s system. Warren also suggested she’s worried about the so-called environmental damage that energy consumption from digitally “mining” cryptocurrencies could cause.

Warren has now given her support to the Federal Reserve’s consideration of a digital dollar, arguing, without presenting any evidence, that it could boost poorer Americans and streamline the payments system if properly designed.

U.S. Senator Elizabeth Warren explained why she thought more regulation is needed for cryptocurrencies. She spoke with Bloomberg’s Joe Weisenthal on “Bloomberg Technology.”