Democratic Senator Elizabeth Warren, known by many as an outspoken cryptocurrency skeptic in the US government, criticized the disruptions of exchanges and high transaction fees during periods of price volatility.
At a Senate Banking, Housing and Urban Affairs Committee hearing on Tuesday with Securities and Exchange Commission Chairman Gary Gensler, Warren said the cryptocurrency industry had failed to provide solutions for financial inclusion in the United States. She mentioned the plunge in cryptocurrency prices. including Bitcoin (BTC) and Ether (ETH) last week, stating that “the $ 400 billion market value has disappeared,” while many users reported problems accessing major exchanges like Coinbase.
Warren hinted that investing in Decentralized Finance, or DeFi projects was “quite risky” given the fact that many of them are not registered with the SEC and do not necessarily fall within its regulatory umbrella. In addition, she highlighted some of the high fees for transactions during periods of volatility – in this case on September 7, when the price of BTC fell from $ 52,920 to an intraday low of $ 42,843.
“The exchange fee between two cryptocurrency tokens on the Ethereum network was over $ 500,” Warren said, referring to trading a hypothetical $ 100 token. …
“Advocates say cryptocurrency markets are all about financial inclusion, but the people who are most economically vulnerable are the ones who are most likely to have to withdraw their money the fastest when the market drops […] high, unpredictable fees can make cryptocurrency trading really dangerous for people who aren’t rich. “
During the two-hour hearing, Gensler responded to several questions from US lawmakers regarding the fundamentals of cryptocurrency policy, the requirement for companies to disclose climate risks to investors and other issues potentially affecting the SEC. In his statement yesterday, he called on cryptocurrency projects to meet with officials by the SEC regarding the securities that platforms may offer in the form of digital assets.
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Senator Warren has often criticized cryptocurrencies as being associated with many illegal activities, including “untrustworthy technology”, fraud and the industry’s impact on climate change. Last month, she proposed banning US banks from holding reserves to support private stablecoins.