Democrat Senator Elizabeth Warren, considered one of the most vocal crypto critics in the United States government, voiced her views about exchange outages and high transaction fees during periods of market volatility.
At a hearing with Securities and Exchange Commission chairman Gary Gensler on Tuesday, Warren said the crypto industry has failed to provide solutions for financial inclusion in the world’s largest economy.
Her recent remarks on the price drops of crypto assets, including Bitcoin and Ether, were accompanied by an observation that "$400 billion in market value wiped off, while many users complained that they were unable to access major exchanges such as Coinbase.
The SEC is not included in the regulatory umbrella of many decentralized finance projects, meaning they are not registered with the SEC or under its supervision. Warren called such investments "very risky."
Furthermore, she pointed out that transaction fees can be very high during volatile periods - in this case, sept. 7, when the price of BTC dropped from $52,920 down to $42,843.
Warren said that the fee to swap between two crypto tokens would be $500 or more on the Ethereum network for a hypothetical token worth $100. These fees are high and unpredictable, making it easy for small investors to lose everything.
Advocates say crypto markets are great for financial inclusion, but people from low-income backgrounds are more likely to have to withdraw their money because of unpredictable fees when the market dips high.
At the two-hour hearing, Gensler answered questions from lawmakers regarding the crypto market, disclosure of climate risks by companies, and other topics that could affect the SEC.
The SEC chairman urged crypto projects to meet with SEC officials regarding the possibility of offering securities via crypto platforms following his testimony yesterday.
Senator Warren has been critical of cryptocurrencies for years, citing "unreliable technology," scams, and the industry's relevance to climate change. She proposed banning private stablecoins from being backed by American banks last month.