Senator Elizabeth Warren (D-MA) issued a sharp warning on Wednesday, arguing that an endorsement of the proposed CLARITY Act from convicted FTX founder Sam Bankman-Fried should serve as a major red flag for lawmakers. The controversy unfolded on social media platform X, where Bankman-Fried, currently serving a 25-year prison sentence for fraud, posted a message praising the legislation and crediting President Donald Trump.
"Sam Bankman-Fried, the fraudster who stole at least $8 billion from customers using his crypto exchange, just endorsed the CLARITY Act," Warren wrote. "That should set off alarm bells." Warren, a longtime critic of the cryptocurrency industry, emphasized that any regulatory framework must prioritize consumer safety and financial system stability over industry growth. "Any crypto market structure bill must protect investors, our financial system, and American taxpayers," she added.
The debate escalated as Bankman-Fried framed the bill as a victory against the Securities and Exchange Commission (SEC). "The CLARITY Act will be a huge milestone for crypto and a huge achievement for @realDonaldTrump," SBF wrote. He reiterated grievances against SEC Chair Gary Gensler, suggesting his prosecution was politically motivated by his regulatory lobbying efforts.
Critics of Warren's stance, like podcast host Tony Edward, pointed to Bankman-Fried's history as a major donor to Democratic candidates, questioning the selective outrage. The CLARITY Act aims to define regulatory jurisdiction over crypto markets, with supporters arguing it reduces confusion and critics like Warren fearing it could weaken investor protections.
