U.S. Senator Elizabeth Warren has raised serious concerns over the proposed CLARITY Act, warning that it could allow major publicly traded companies like Tesla and Meta to sidestep regulatory oversight by the Securities and Exchange Commission (SEC) through blockchain-based tokenization of their stocks.


🔹 Tokenization as a Loophole to Escape SEC?

During a Senate Banking Committee hearing, Warren highlighted the risks of the bill currently under debate. She claimed that companies could move their shares onto a blockchain, effectively removing themselves from traditional SEC scrutiny:

“A company like Meta or Tesla could just tokenize its shares — and poof! — escape all SEC regulation,” she said.

Warren warned that such a shift could undermine financial market stability and weaken investor protections. While she supports regulatory clarity for crypto, she argued the CLARITY Act could go too far by dismantling existing safeguards.


🔹 Market Manipulation and Investor Risk

Warren also cautioned that the bill could enable market manipulation, as companies might use tokenization to bypass established rules designed to ensure transparency and fairness in trading.

Despite SEC Commissioner Hester Peirce’s assurance that tokenized securities would still fall under federal securities laws, Warren remains concerned that a regulatory gap could emerge — and be exploited.


🔹 Ripple CEO: The U.S. Needs Smart Regulation

Brad Garlinghouse, CEO of Ripple, also spoke at the hearing, advocating for a clear and balanced framework for digital assets.

“The lack of clear rules has led to confusion. The U.S. needs smart regulation to support safe and responsible crypto growth,” he said.

Garlinghouse emphasized that regulatory uncertainty could jeopardize the U.S.’s global competitiveness in the digital asset sector.


🔹 Warren Criticizes Political Ties to Crypto Industry

Warren also expressed concern over crypto industry influence on lawmakers. She pointed to Meta and its ambitions to launch a stablecoin, and criticized some Republican lawmakers for pushing laxer regulations favoring crypto firms.

She went further, highlighting potential conflicts of interest involving Donald Trump, whose family firm World Liberty Financial is involved in crypto through ventures like the “Official Trump” memecoin and DeFi projects. Reports suggest Trump has earned over $620 million from his crypto holdings — a financial link Warren fears could sway regulatory decisions in favor of the industry.


❗ Summary:

The CLARITY Act has sparked heated debate. While some view it as a step toward clearer digital asset regulation, Senator Warren warns it could open dangerous loopholes, allowing large firms to bypass SEC oversight. The controversy reflects a growing tension between innovation and investor protection in U.S. financial policy.



#SEC , #ElizabethWarren , #Tesla , #meta , #ElonMusk

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