Elizabeth Warren Warns Current Crypto Rules Could Trigger Financial System Collapse
U.S. Senator Elizabeth Warren has renewed her call for tighter cryptocurrency regulation, warning that the current framework leaves the door open to corruption, economic instability, and criminal exploitation.
Speaking in a recent interview with MSNBC, Warren said the existing rules governing digital assets pose “serious risks” to the U.S. financial system. She described the current approach as a “weak giveaway” that benefits the industry while failing to impose safeguards that protect consumers and prevent abuse.
“We need strong cryptocurrency regulations, not a gift that endangers our economy and fuels corruption from President Trump,” she said.
A long-time critic of the crypto sector, Warren argued that effective rules must include restrictions on elected officials trading or holding digital assets. She reiterated concerns over former President Donald Trump’s close ties to the industry, suggesting that existing regulations could be shaped to favor his personal interests over essential protections.
Warren also called for robust measures to prevent the use of cryptocurrencies by terrorists and drug traffickers, insisting that digital asset laws must serve legitimate purposes only. “We need comprehensive limits to curb corruption and make crypto safer to trade,” she said.
Her remarks come as the U.S. crypto industry begins to see long-awaited regulatory clarity. In July, the House of Representatives passed three landmark bills: the GENIUS Stablecoin Act, the CLARITY Act for digital asset markets, and the States’ Anti-CBDC Surveillance Act. Together, they represent the first coordinated legislative push to define the rules of the road for digital assets after years of delays and fierce political opposition.
While Warren was an outspoken critic of these measures earlier this year, calling them ineffective, her latest comments have been interpreted by some as a softening stance. She did not directly condemn the newly passed bills, instead emphasizing the need to strengthen them.
Justin Slaughter, former counsel at the U.S. Securities and Exchange Commission and current policy director at Paradigm, noted that Warren’s acknowledgment of the need for digital asset legislation is noteworthy. “She’s not attacking the new laws outright, she’s focusing on what she wants the next wave of rules to include,” he said.
Warren’s warning about Trump’s influence mirrors the concerns of other critics who see potential conflicts of interest in his connections to crypto projects. Since returning to office, Trump has championed stronger digital asset standards as part of his vision to position the U.S. as a global crypto hub. However, his ties to ventures such as meme coins and the World Liberty Financial initiative — which reportedly generated more than $57 million in income, have sparked questions over whether policymaking could be influenced by personal profit.
The Trump team has denied any wrongdoing. White House spokesperson Seth Fields told Bloomberg that the president “has not and will not engage in any conflicts of interest.” Donald Trump Jr. echoed that stance in a June interview with NewsNation, saying his father “isn’t involved in any of these things” and that any holdings are “walled off” and not actively managed by him.
With the digital asset market evolving rapidly, the urgency for clear, effective regulation has never been greater. The challenge, lawmakers and industry leaders agree, is finding the right balance, one that protects consumers and the financial system without stifling innovation in a sector that continues to reshape global finance.
