Skip to main content

Sen. Warren: Biden administration worked to stop crypto being 'dangerously intertwined' with banks

The Massachusetts senator, an outspoken skeptic of crypto, applauded the efforts of FDIC acting chair Martin Gruenberg to separate digital assets from banking.

Referring to the events surrounding the collapse of FTX as “a handful of magic beans”, Massachusetts Senator Elizabeth Warren seemed to frame the “contagion” spreading through the crypto space as a partisan issue.

Speaking at a Senate Banking Committee nomination hearing on Nov. 30, Warren addressed committee counsel Jonathan McKernan, who confirmed that FTX’s bankruptcy had largely not affected traditional banking institutions in the United States. The Massachusetts senator, an outspoken skeptic of cryptocurrencies, used some of her time to applaud the work of Federal Deposit Insurance Corporation, or FDIC, acting chair Martin Gruenberg, who attended as part of his nomination to assume the position as part of a five-year term.

“Our banks stayed safe even as crypto imploded because many of President Biden's regulators, like acting chairman Gruenberg, fought to keep crypto from becoming dangerously intertwined with our banks,” said Warren. “He did this despite the Trump administration's and crypto boosters’ aggressive efforts to bring crypto and all its risks into traditional banking.”

Gruenberg responded in the affirmative to one of Warren’s questions in which she claimed the banking system would have been “less safe” had firms like FTX received similar insurance from the FDIC:

“The evidence is clear now. We had companies that were engaging in highly speculative activity, highly leveraged, and vulnerable to a loss of confidence in a run. They did not have direct exposures to the insured financial institutions, and as a result the failure of those firms was really limited to the crypto space, and ended up not impacting the insured banking system.”
Senator Elizabeth Warren speaking at a Senate Banking Committee hearing on Nov. 30

Warren went on to refer to crypto assets as “toxic” and unsuitable to integrate in traditional banking, claiming taxpayers could suffer the consequences. The senator was one of the lawmakers behind a Nov. 23 letter calling on the Justice Department to investigate the collapse of FTX and potentially prosecute individuals involved in wrongdoing, specifically naming former CEO Sam Bankman-Fried for his role in the controversy.

Related: How stable are stablecoins in the FTX crypto market contagion?

The ripple effects of a major exchange like FTX declaring bankruptcy amid a bear market are ongoing. Crypto firm BlockFi filed for Chapter 11 bankruptcy on Nov. 28, saying FTX owed certain financial obligations to the company. Global lawmakers and regulators have also announced intentions to investigate the events surrounding FTX and potentially create new regulatory frameworks, including those from the European Central Bank, U.S. state governments, and securities regulators in the Bahamas.



from https://ift.tt/1GeVjkd
https://ift.tt/TdQHkwr

Comments

Popular posts from this blog

DeFi isn’t dead, it just needs to fix these 3 critical problems

It’s been a rough year for DeFi, and it may not get any better until projects focus more on security, regulation and usability. The persistent challenges  decentralized finance  face have been well documented by a handful of analysts and the recent collapse of the Terra ecosystem re-enforced the fact that something is critically wrong with DeFi. I think DeFi today is completely broken for 99% of the population. The promise of a more transparent financial system has been overtaken by greed. UST/LUNA is just the latest in a string of bad developments: — Peter Yang (@petergyang) May 11, 2022 Let's take a look at what experts say DeFi needs to do in order to have another revival.  Improved usability To date, the promise of open and uncensored access to a global decentralized financial system has been largely hampered by the complicated interface, confusing multi-step staking processes and lack of clarity surrounding the yields on various tokens. What do you thi...

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...

National Futures Association adds rules for members handling digital assets

The CFTC-linked self-regulatory organization (SRO) has disclosure rules for members engaging in activities with BTC and ETH; now, standards of conduct are being added. The National Futures Association (NFA), the United States self-regulatory organization for derivatives markets, has issued a new compliance rule addressing members’ conduct. The new rule complements requirements issued in 2018. The NFA has “well over 100” members that engage in activities with digital asset commodities, but no way to address fraud or misconduct committed by those members, the organization explained to secretary of the Commodity Futures Trading Commission (CFTC) Christopher Kirkpatrick in a Feb. 28 letter as it submitted the proposed new rule for approval. The new rule is modelled on the NFA’s antifraud rules for exchange traded futures and swaps transaction and retail foreign exchange. The NFA is the only registered self-regulatory organization that has delegated authority from the CFTC, giving it a...