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 crypto industry had failed to provide solutions for financial inclusion in the United States. She mentioned the fall in the price of cryptocurrencies, including Bitcoin (BTC) and Ether (ETH) last week, stating that “the market value of $ 400 billion 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 are not necessarily within its regulatory umbrella. In addition, it singled out some of the high transaction fees 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. “In the face of such high, unpredictable fees, small investors can easily get stuck and go broke.”
“Advocates say crypto markets are 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 falls. […] high, unpredictable fees can make cryptocurrency trading really dangerous for the poor. “
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 information about climate risks to investors, and other issues potentially affecting the SEC. In a statement on his testimony prepared yesterday, he urged crypto projects to meet with SEC officials about the securities that platforms may offer in the form of digital assets.
Senator Warren has often criticized cryptocurrencies for 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.