Warren unveils crypto standards, slams GOP 'handout' to industry

Sen. Elizabeth Warren, a long-time critic of the crypto industry, released a set of proposed standards to regulate the sector and curb what she calls the president's crypto corruption."

The Massachusetts Democrat denounced Republican colleagues in a statement sent to The Block, and accused them of seeking to give an "industry handout."

"We need a crypto regulatory framework that reduces these risks," Warren said. "But I’m concerned that what my Republican colleagues are aiming for is another industry handout that gives the crypto lobby everything on its wish list: The blessing of the government’s approval, combined with crypto rules that are weaker than the rules every other financial actor must follow." 

The U.S. Senate Banking Committee will hold a hearing this morning titled "From Wall Street to Web3: Building Tomorrow's Digital Asset Markets." After passing legislation to regulate stablecoins in the Senate, setting it up for consideration in the House next week, senators are tackling a larger bill to determine how to regulate the cryptocurrency industry. 

Republican Sens. Cynthia Lummis, Thom Tillis, and Senate Banking Committee Chair Tim Scott released principles for market structure legislation last month. The U.S. is behind in creating clear rules compared to the European Union and needs legislation to stay ahead, Lummis said when those principles were released. 

The House has forged ahead with its version of a market structure bill through the Clarity Act. The bill aims to establish a clear regulatory framework for crypto, in part, by designating how the Securities and Exchange Commission and the Commodity Futures Trading Commission will regulate. Two pivotal committees passed the bill earlier this month, positioning it for a vote in the full House.

President Donald Trump's crypto interests have also been a focal point of many Democrats' criticisms. The president has profited significantly from his family's crypto ventures, including the World Liberty Financial DeFi and stablecoin project, as well as from the TRUMP and MELANIA memecoin launches. Bloomberg estimated that the president has profited some $620 million in recent months. 

Legislation should "shut down the president's crypto corruption," by blocking public officials, including the president, from issuing, profiting, and sponsoring tokens, Warren said in her prepared remarks on Wednesday. The bill should also include strong anti-money laundering provisions, she said. 

Others have also criticized lawmakers' approach. New York Attorney General Letitia James said Clarity "fails to provide substantial regulatory guardrails to prevent and prosecute fraud," in a letter to lawmakers last week. 

Six witnesses are set to testify during the Senate hearing on Wednesday, including Richard Painter, the former chief White House ethics lawyer for President George W. Bush, and Summer Mersinger, CEO of the Blockchain Association. Ripple CEO Brad Garlinghouse will also be answering questions from lawmakers. 

In prepared remarks, Garlinghouse said that legislation needed to protect consumers, hold bad actors accountable, and foster innovation. 

"A constructive and workable framework for digital assets and stablecoins that achieves these goals will expand access to financial markets, create jobs, boost the economy - and put the U.S. on the path to being a global blockchain and crypto leader," he said.