Massachusetts Senator Elizabeth Warren has issued a stark warning over the potential consequences of proposed cryptocurrency legislation, suggesting that it could allow major U.S. corporations to sidestep existing securities laws.
During a Senate Banking Committee hearing on Wednesday, Warren, a vocal critic of the Crypto industry, said she supports digital asset regulation that reinforces the U.S. financial system.
However, she voiced serious concerns about the Digital Asset Market Structure Clarity Act—known as the CLARITY Act—which is currently under consideration in the House of Representatives.
Warren argued that the bill could inadvertently provide a backdoor for publicly traded companies to avoid regulation by the U.S. Securities and Exchange Commission (SEC).
Tokenizing Stocks Could Undermine Oversight, Senator Claims
In her remarks, Warren warned that companies could take advantage of the proposed legislation by tokenizing their assets on a blockchain.
This, she said, would enable them to escape SEC oversight altogether.
“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,” she said.
“That is a serious problem for our country.”
Warren also voiced skepticism about Meta’s potential influence on crypto-related legislation, referencing the company’s previous plans to launch its own stablecoin.
This concern was raised in relation to the GENIUS Act—short for Guiding and Establishing National Innovation for US Stablecoins—another bill being reviewed in tandem with the CLARITY Act.
Conflicts of Interest Under Scrutiny
The hearing marked a rare Senate-level discussion of crypto market structure, and featured testimony from high-profile figures including Ripple CEO Brad Garlinghouse and former Commodity Futures Trading Commission (CFTC) officials.
Garlinghouse highlighted the widespread adoption of crypto in the U.S., asserting that meaningful regulation is urgently needed.
“Over 55 million Americans participate in the crypto economy, which equates to a $3.4 trillion market cap today,” he stated.
“A smart regulatory framework for crypto market structure is essential to realize that future, and is long overdue.”
Richard Painter, a former White House ethics lawyer invited by Warren, added to the conversation by addressing ethical concerns.
He emphasized the importance of lawmakers avoiding conflicts of interest when legislating on digital assets.
“We cannot have the people who are in charge of passing legislation and enforcing legislation, implementing legislation, have conflicts of interest with their official responsibilities,” he said.
“You should be divesting from crypto if you’re going to be regulating crypto.”
Trump’s Crypto Ties Criticized
Warren and Painter also singled out former President Donald Trump, accusing him of having direct financial stakes in the crypto space.
Trump has recently gained substantial value through ventures like World Liberty Financial and his own token, Official Trump (TRUMP), which is currently trading at $9.00.
The senator accused Republicans of prioritizing crypto lobbyists over public interest, referring to pending legislation as an “industry handout.”
She criticized lawmakers for not addressing what she described as Trump’s “corruption” through his crypto dealings.
According to a Bloomberg report dated July 2, Trump has seen his crypto holdings swell by $620 million in recent months.