I told you so.
Believe it or not, as an elected official, I hate saying those four words. Not because I don’t like being right, but because when the moment comes to say them, it usually means that something has gone terribly wrong. It also means other elected officials and policymakers were warned and chose to ignore that warning and move ahead anyway.
We warned them about the risks of tearing down the barriers between commercial and investment banking, and of deregulating regional banks. But those warnings were ignored, those bills became law, and when it all came crashing down, everyone was quick to point fingers, but not at themselves. Now, I’m sounding the alarm about the risks of pending crypto legislation, which will open the floodgates to massive fraud and financial ruin for millions of American families.
I’m sounding the alarm about the risks of pending crypto legislation.
This week, the House will consider several crypto bills, including the so-called CLARITY Act and the GENIUS Act, which proponents claim will establish a pro-innovation regulatory framework for crypto that also safeguards consumers and investors. But the reality is that they would be passing bills written by and for the crypto industry. If either bill passes through Congress, we’ll one day look back on its enactment as a pivotal moment in time — much like we point to the Gramm-Leach-Bliley Act of 1999. That legislation dismantled Glass-Steagall’s firewall between commercial and investment banking, allowing banks, brokers and insurers to combine into mega financial “supermarkets” — all in the name of “innovation.”
When the predatory mortgages-fueled housing bubble burst, these “innovators” who amassed their wealth on the backs of vulnerable families required massive taxpayer bailouts. That is, they privatized their gains and socialized their losses. A warning from the more recent past is the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which weakened oversight of regional banks and exposed depositors to potential losses, as seen in the collapse of Silicon Valley Bank in 2023.
Crypto often paints its critics as Luddites at best, anti-American at worst. The fact is, the CLARITY and GENIUS bills wrap themselves in the flag of innovation, but all they really do is replicate the same mess that led to past financial crises: They call for few regulations, minimal enforcement, weak consumer protections and more industry consolidation.
On top of that, these bills have a special, intentional wrinkle that makes them especially dangerous: They would legitimize and legalize the unprecedented crypto corruption by the president of the United States.
Donald Trump and his family are raking in piles of cash, much of it through shady crypto ventures, which have made Trump $1.2 billion richer. At the same time, the Trump administration has gutted watchdogs and silenced critics, allowing Trump to exploit the oversight gap created to enrich himself through meme coins, stablecoins and backroom deals with foreign governments. What we’re witnessing isn’t just unethical; it’s the largest fraud and abuse of power in modern history.
Trump has used the power of the presidency to pitch crypto deals abroad.
Trump has used the power of the presidency to pitch crypto deals abroad — engaging with questionable and dangerous foreign entities. The bills Congress will consider this week place no checks on that behavior. Indeed, they make it easier for Trump’s personal financial interests to dictate U.S. policy.
In committee, Democrats offered numerous amendments to curtail the president’s abuse of power. Republicans voted down every single one.
Trump’s corruption shouldn’t be our only concern, however.
A big problem with these bills is that they fail to protect consumers. The CLARITY Act handcuffs the Securities and Exchange Commission, preventing it from proactively protecting people against fraud. Regulators would have to wait until after investors have already been harmed to act — potentially after a company has collapsed and life savings have vanished. We’ve seen this before. FTX collapsed because insiders illegally operated the exchange, controlled customer funds and traded against their own clients. The CLARITY bill does nothing to address that and, in fact, actually creates space for similar schemes. This won’t just affect consumers in crypto markets — CLARITY will undermine traditional securities markets by creating loopholes that traditional firms can use to evade our existing securities laws.
The GENIUS Act is no better. Though its supporters say it will provide urgently needed protections for users of stablecoins, there’s no funding provided to regulators to implement the law, and the consumer protections it provides are weak. In contrast to the way banks are regulated, there are no community reinvestment requirements, no third-party vendor oversight, and the federal oversight of stablecoin issuers licensed by states or overseas is weak. This leaves users vulnerable to fraud and discrimination. A second problem is that the bills create serious national security risks. While the CLARITY Act mentions the Bank Secrecy Act (BSA), it does little to actually enforce it. During the House Committee on Financial Services’ markup of the bill, Republicans summarily rejected Democratic proposals to ensure crypto companies comply with the BSA, commensurate with the risks of financial crime facing their firms. The bill also broadly exempts the decentralized finance industry from nearly all oversight, a category that Trump’s World Liberty Financial notably claims to fall under. Meanwhile, the GENIUS Act opens the floodgates to foreign-controlled crypto that poses serious national security risks, all to appease Trump’s inner circle, which has ties to crypto. These bills will only strengthen Wall Street’s dominance alongside Big Tech, while squeezing out smaller innovators. A third problem is that the bills entrench Wall Street’s power. Crypto has long been sold as a way to democratize finance away from big banks. But these bills will only strengthen Wall Street’s dominance alongside Big Tech, while squeezing out smaller innovators. They give megabanks and Big Crypto the green light to consolidate control. This should be enough reason for my colleagues to vote no. In a few weeks, we’ll mark the 15th anniversary of the Dodd-Frank Act, landmark legislation that Congress passed in response to the 2008 financial crisis. That crisis was made so much worse by one of those Wall Street supermarket firms, AIG, an insurance giant that was allowed to insure complex, poorly regulated and dangerous financial instruments. I will never forget the despair of Americans who lost their homes, jobs and life savings then. Many of them never recovered. Passing the CLARITY and GENIUS Acts would prove that we learned nothing from that disaster. Congress now has a choice: Protect the public and uphold democratic accountability, or hand over the keys to a president using his power for personal gain. If these bills become law, America will eventually face its first crypto financial crisis. And when that happens, my Republican colleagues will likely point fingers at everyone but themselves, just as they’ve always done, and say they had no idea this could happen. But I won’t. I’ll say I told you so. And then I’ll get to work on cleaning up their mess.
Rep. Maxine Waters
Maxine Waters represents California's 43rd congressional district in the House of Representatives. 
