Pump and Dump Schemes

Crypto industry leaders ‘scared of a strong SEC’ — Senator Warren

Senator Elizabeth Warren claims the Trump Administration “gave a green light” to a cryptocurrency market full of junk tokens, rug pulls and Ponzi schemes.

United States senator and crypto skeptic Elizabeth Warren wants the Securities Exchange Commission (SEC) to “double down” on its crypto enforcement efforts, highlighting that the cryptocurrency industry is running “scared” for what’s to come next.

Warren’s comments came during an interview with the American Economic Liberties Projects on Jan. 25.

The senator opined that since Gensler was sworn in as SEC chairman in April 2021, the Commission “has made a good start” on fixing some of the problems created by the former SEC leaders under the Trump Administration.

*Senator Elizabeth Warren wants Congress to deploy more authorities and resources to help the SEC crackdown on the cryptocurrency industry participants. Source:* *Reuters*

Warren claimed that the previous SEC administration “essentially gave the green light” to open up a cryptocurrency market “full of junk tokens, unregistered securities, rug pulls, Ponzi schemes, pump and dumps, money launderings and sanctions evasions.”

But that’s now being cleaned up under Gensler’s leadership, which has industry leaders scared, according to Warren:

“It appears that the commission is still ramping up. That is why the industry is scared of a strong SEC, and that’s why it is spending millions of dollars each year lobbying to escape SEC oversight.”

The crypto critic also pointed the finger at crypto lending companies, celebrity promoters and inside traders whom she said have misled andeceived retail investors.

But Warren didn’t stop there.

The Massachusetts politician said the SEC needs to “use the full force of its regulatory powers” in order to “reign in the frauds inflicted on American consumers.”

“The SEC should double down and use its tools to enforce the rules, and where the SEC needs more cops on the beat, then Congress needs to step up with the resources and the new authorities that are needed to ensure the SEC can do its work at full strength in every corner of the crypto market.”

The senator also called on U.S. regulators in the banking and environment sectors to impose more accountability measures against some of the bigger players in the cryptocurrency industry.

1:30PM: We’ll kick off an event with @RealBankReform and @SenWarren to examine the rise and fall of the crypto industry — and what it means for policymakers.

RSVP here. You won’t want to miss it.https://t.co/nj8xsJbPur pic.twitter.com/A1saROKeZU

— American Economic Liberties Project (@econliberties) January 25, 2023

“The commission has been loud and clear that crypto doesn’t get a pass for longstanding security laws that protect investors and ensure the integrity of our financial markets,” she added.

However, not all U.S. senators appear to have put Gensler’s SEC on the same pedestal.

New York Senator Ritchie Torres asked the U.S. Government Accountability Office on Dec. 6 to conduct an investigation into the SEC’s failure to examine and expose FTX’s alleged fraud months before the cryptocurrency exchange collapsed:

“One cannot have it both ways, asserting authority while avoiding accountability.”

A few days later, on Dec. 10, Minnesota Senator Tom Emmer slammed the SEC and Gensler for his flawed “crypto information-gathering efforts” following FTX’s meltdown, saying that he should have to explain the cost of his “regulatory failures” to Congress.

Billionaire investor Bill Ackman says ‘crypto is here to stay’

Bill Ackman’s conviction on crypto comes as much of the community attempts to regain confidence in the industry following the FTX fallout.

Billionaire investor and hedge fund manager Bill Ackman says he remains bullish about cryptocurrencies, despite the recent collapse of the FTX cryptocurrency exchange and the market turmoil that has followed it.

In a Nov. 20 Twitter thread, the CEO and founder of hedge fund management firm Pershing Square Capital Management said he believes that “crypto is here to stay” despite recent challenges, though there’s a need to increase oversight and remove “fraudulent actors” in the space.

Bill Ackman is a billionaire American investor who most recently called for the removal of regulatory barriers and easing of regulations in New York in order to make the city a crypto hub. He is also a direct investor in a number of cryptocurrency projects.

“I think crypto is here to stay and with proper oversight and regulation, it has the potential to greatly benefit society and grow the global economy,” he said.

However, Ackman said that like the invention of the telephone and the internet, the technology improves on the next in terms of its ability to facilitate fraud:

“The problem with crypto is that unethical promoters can create tokens simply to facilitate pump and dump schemes. It may in fact be that the vast majority of crypto coins are used for fraudulent purposes rather than for building legitimate businesses.”

That being said, Ackman said that with proper oversight from industry leaders, these “fraudulent actors” can be eliminated:

“All legitimate participants in the crypto ecosystem should therefore be highly incentivized to expose and eliminate fraudulent actors as they greatly increase the risk of regulatory intervention that will set back the positive potential impact of crypto for generations.”

The investor also said while he was initially a “crypto skeptic” he now sees it as having “the potential to greatly benefit society and grow the global economy,” he said, adding:

“I was initially a crypto skeptic [but] I have come to believe that crypto can enable the formation of useful businesses and technologies that [before now] could not be created.”

“The ability to issue a token to incentivize participants in a venture is a powerful lever in accessing a global workforce to advance a project,” he added.

Ackman added that “sensible regulation and oversight” would be crucial in progressing the technology forward.

The hedge fund manager’s tweet comes in light of the recent FTX collapse.

According to reports, Ackman initially praised former FTX CEO Sam Bankman-Fried for owning up to his mistakes, but later deleted the tweet.