Warren Unveils Framework for Regulating Crypto Industry and Shutting Down Trump's Corruption

As the U.S. House prepares to vote on the latest proposal claiming to regulate the cryptocurrency industry—one that critics say is actually a "cash grab" that will harm consumers—Sen. Elizabeth Warren on Wednesday took the opportunity of a hearing on digital assets to outline her five main priorities for any legislation aimed at regulating crypto.

Along with protecting consumers within the crypto market, she said, Congress must pass legislation that safeguards the country from public officials—including President Donald Trump—who want to personally profit from the burgeoning industry.

Those priorities haven't been addressed, she suggested, in proposals like the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and the Digital Asset Market Clarity (CLARITY) Act, which lawmakers are expected to vote on in the coming days.

"I'm concerned that what my Republican colleagues are aiming for is another industry handout that gives the crypto lobby exactly 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," said Warren (D-Mass.).

Any regulatory framework for the crypto industry, in which investors can use real money to purchase virtual or digital assets and trade them on decentralized, unregulated blockchain technology, must include the framework set up by "the securities laws that have served as the bedrock of our capital markets for nearly 100 years," said Warren—but the CLARITY Act includes language that would allow "non-crypto companies to tokenize their assets to evade the SEC's [Security and Exchange Commission] regulations."

"If we're going to provide rules of the road for crypto, we need to shut down this superhighway for presidential corruption at the same time."

"Under the House bill, a publicly traded company like Meta or Tesla could simply decide to put its stock on the blockchain and POOF! it would escape all SEC regulation," said Warren.

Americans for Financial Reform (AFR) also spoke out against the CLARITY Act's provision on Tuesday, saying the bill would "create a race to the bottom and fuel fraud and financial instability."

With the crypto market growing 15-fold over the last five years, with a $3 trillion market capitalization in 2024, risks to "investors, our financial system, and our national security have also sharply increased," Warren warned in the hearing.

She pointed to FBI findings that Americans lost more than $9 billion to fraud in the unregulated crypto market last year—a 66% increase from 2023‚ and a Chainalysis report that hackers from North Korea were able to steal $1.3 billion from crypto platforms in 2024 as well as $1.5 billion earlier this year.

"Crypto investors should have the same protections from getting scammed or cheated as investors in any other asset," said Warren. "For example, there is no reason that the rules prohibiting stock exchanges from simultaneously serving as brokers and giving preferential treatment to their own trades over their customers' can't be applied to the crypto market too."

Warren also called for legislation that ensures instability in the crypto market won't "infect" the larger financial system by guaranteeing that taxpayers are not on the hook for "risky crypto bets," and that includes commonsense rules to protect national security and fight crime within the industry.

The GENIUS Act, which 18 Democrats joined the vast majority of Senate Republicans in passing last month, did not include anti-money laundering rules or sufficiently close sanctions loopholes, said Warren, with Republicans saying the issues could be addressed in a future bill regarding crypto market structure.

"So this is it. No more kicking the can down the road. Now is the time to solve that problem," said Warren.

Finally, Warren said any bill addressing regulations in the crypto market must "shut down the president's crypto corruption" by prohibiting all public officials from issuing, sponsoring, or profiting from crypto tokens.

Warren's comments came weeks after Trump held a dinner with the top 220 investors in his own $TRUMP meme coin and offered a VIP White House tour to the top 25 mostly anonymous investors—an event that progressive organizers said was "corruption embodied."

"Nobody wants weak crypto rules more than the president of the United States," said Warren, noting that $7 billion of Trump's wealth now comes from his own stablecoin and meme coin, a bitcoin mining company, a "huge portfolio of crypto investments," and includes more than $320 million in fees from the $TRUMP coin—even as the majority of investors in the token lost money.

"If we're going to provide rules of the road for crypto, we need to shut down this superhighway for presidential corruption at the same time," said Warren.

Urging Congress to vote against the CLARITY Act this week, AFR also warned that the "massive deregulatory bill" is backed by "a gusher of campaign cash and lobbying muscle from ultrawealthy venture capital firms and crypto billionaires," with Trump set to "gain the most from this giveaway" after making $1.2 billion in crypto just in the past few months."

"CLARITY (along with related crypto bills being considered) is a custom-built framework that gives him and his billionaire allies a green light to manipulate financial markets," said the group, "while working families are left holding the bag."