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- Warren slams Trump’s crypto law, warning of major regulatory loopholes.
- Treasury urged to fix stablecoin risks tied to Trump-backed law.
- Lawmakers push for tighter crypto oversight amid Warren’s fierce criticism.
Senator Elizabeth Warren has fiercely criticized the Guiding and Establishing Innovation for U.S. Stablecoins Act, known as the GENIUS Act. She warned that the Trump-backed law could endanger consumers and weaken the nation’s financial safeguards if left unchecked.
Punchbowl News reports that Warren wrote a letter to the Secretary of the Treasury, Scott Bessent, requesting a swift response. She pressured the Treasury to increase control and close loopholes that may favor Trump allies and big crypto companies.
Also Read: China Orders Ant Group and JD.com to Pause Stablecoin Plans in Hong Kong
The GENIUS Act, which President Donald Trump signed, will enable stablecoins to be pegged against U.S. dollars or other liquid assets. It further requires issuers with a market capitalization exceeding $50 billion to undergo annual audits. Warren claims that the law is pro-crypto bank and does not provide enough consumer protections.
Warren Raises Alarm Over Conflicts and Consumer Risks
In the letter, Warren cautions that the legislation has a high possibility of enabling political supporters and other large investors to take advantage of lax regulatory bodies. She urged the Treasury to avoid using its power or a sense of favoritism to compromise market fairness.
In addition to political risks, Warren explained that the law does not safeguard users in the event that the issuers of stablecoins go bankrupt or misuse the money. She has emphasized that there must be high accountability to maintain stability and prevent crypto losses for taxpayers.
Federal Reserve Governor Michael Barr came out in support of her and described the GENIUS Act as incomplete and full of regulatory loopholes. He encouraged the federal and state agencies to collaborate in enhancing consumer protection and financial supervision.
Lawmakers Push for Broader Crypto Oversight
Congress is currently formulating new laws to oversee the broader cryptocurrency sector and address the shortcomings of the GENIUS Act. The Democrats and Republicans are conducting independent meetings with crypto executives to discuss market structure and risk mitigation.
Warren opined that through these discussions, the Treasury should strengthen consumer protection and seal existing loopholes in the legislation. She further stated that stricter enforcement is necessary to prevent financial instability and safeguard national security.
Her warning reflects growing concern in Washington regarding crypto regulation and the role that Trump-related interests play.
Also Read: Ethena Labs Set for Major Expansion as It Gears Up to Launch Two New Crypto Products
