Senator Warren attacks Ethereum network costs during committee hearing

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Democratic Senator Elizabeth Warren, known to many as an outspoken cryptocurrency skeptic in the United States government, has criticized stock market outages and high transaction fees during times of price volatility.

In a Senate Banking, Housing and Urban Affairs Committee hearing Tuesday with Securities and Exchange Commission Chairman Gary Gensler, Warren claimed the crypto industry has failed to deliver solutions for financial inclusion in the United States. She mentioned the price drops among cryptocurrencies including Bitcoin (BTC) and Ether (ETH) last week, claiming that “$ 400 billion in market value was gone” while many users reported problems. access to major exchanges like Coinbase.

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Warren suggested that investing in decentralized finance projects, or DeFi, was “quite risky” given that many have not registered with the SEC and do not necessarily fall under its regulatory framework. Additionally, she highlighted some of the high transaction fees during times of volatility – in this case on September 7, when the price of BTC fell from $ 52,920 to an intraday low of $ 42,843.

“The fee for exchanging between two crypto tokens on the Ethereum network was over $ 500,” Warren said, referring to trading a hypothetical token worth $ 100. “With these high and unpredictable fees, small investors could easily get stuck and completely wiped out. “

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She added:

“Lawyers say the crypto markets are all focused on financial inclusion, but the most economically vulnerable are the ones who are most likely to have to withdraw their money fastest when the market goes down. […] high and unpredictable fees can make crypto trading really dangerous for people who are not rich. “

Gensler answered several questions from U.S. lawmakers during the two-hour hearing regarding a cryptocurrency policy framework, requiring companies to disclose climate risks to investors, and other issues that could affect the SEC . In a statement prepared for his testimony released yesterday, he encouraged crypto projects to meet with SEC officials regarding the securities that platforms can offer as digital assets.

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Related: Senator Elizabeth Warren calls crypto the ‘new shadow bank’

Senator Warren has often criticized cryptocurrencies as being linked to many illegal activities, including “unreliable technologies”, scams and the industry’s impact on climate change. Last month, she proposed banning U.S. banks from holding reserves to back private stablecoins.