Massachusetts Senator Elizabeth Warren appeared to have softened her previously hardline stance against the cryptocurrency industry. During a recent debate with XRP advocate John Deaton, Warren signaled a more measured approach to digital assets.

The shift comes as cryptocurrency increasingly emerges as a political priority in the US election campaign.

Elizabeth Warren Signals Softer Crypto Approach

The Senator’s debate with rival aspirant John Deaton on Tuesday sparked speculation on whether Elizabeth Warren is rethinking her approach to the growing industry. The current Massachusetts Senator, who has often criticized cryptocurrencies for their potential to enable illicit activities and evade regulation, took a more balanced position this time.

“I’m all for having a crypto system if people want to buy and sell crypto. All I want is for them to follow the same rules as everyone else,” Warren expressed.

This statement reflects a significant departure from her prior rhetoric, which has often focused on the risks and downsides of crypto. While Warren emphasized the need for regulation and consumer protections, her openness to the idea of a functioning crypto market caught many by surprise.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

The remarks came as Warren clashed with John Deaton, a prominent attorney and advocate for the crypto industry. Deaton highlighted Warren’s past efforts to regulate or outright ban cryptocurrencies and called her out for previous attempts to stifle the industry.

“It’s hardly surprising that industry players would back a pro-crypto candidate when you’ve tried to ban them,” Deaton said.

Warren, however, quickly responded by accusing Deaton of having financial ties to the crypto industry. She claimed that “90% of Deaton’s campaign” was funded by the crypto sector, suggesting this could compromise his integrity if elected.

“If John Deaton goes to Washington, his crypto buddies are going to want a return on their investment,” said Warren.

Taken together, the debate displays the deep ideological divide between the Republican and Democrat candidates. Specifically, while Warren focused on enforcing stricter rules and transparency, Deaton emphasized the potential benefits of supporting crypto innovation.

Deaton’s Criticism and Political Jabs as Warren’s Position on Crypto Evolves

Deaton did not hold back in his criticism of Warren’s stance, both in the debate and in his wider advocacy efforts. He pointedly said that Senator Warren should attack inflation the way she attacks crypto. He hinted that her efforts to curtail the industry have distracted from other pressing economic issues.

In a light-hearted but sharp comment, Deaton also mentioned his role in helping Chris Larsen, co-founder of Ripple, donate XRP to Vice President Kamala Harris, Warren’s candidate of choice.

“Madam Vice President, if you’re watching, you’re welcome,” Deaton quipped.

This was an allusion to the irony of supporting a candidate with links to Warren despite her anti-crypto history. It remains to be seen whether this marks a full pivot for Warren or simply a strategic recalibration. Galaxy’s head of Research, Alex Thorn, said Warren showed consistency in her remarks.

“No warren’s being consistent. May seem reasonable when she says same rules as the banks, but she means applying BSA compliance to non-custodial entities like wallets, software devs, smart contracts, miners, validators, which is effectively a ban on blockchain networks themselves,” Thorn commented.

Others like Caitlin Long, Custodia Bank founder, said Warren is okay with big banks jumping the Federal Reserve’s line. Nevertheless, her position seems to have evolved. Warren’s statement, “I’m all for having a crypto system,” as long as it adheres to banking rules and consumer protections, suggests she is not abandoning her regulatory goals.

Instead, she may recognize cryptocurrency’s growing importance in the global economy and adjust her approach to focus more on accountability rather than outright opposition.

Read more: How Can Blockchain Be Used for Voting in 2024?

Deaton’s closing remarks reflected this shift as well, noting that Warren was “not very anti-crypto tonight.” The debate has raised new questions about the future of cryptocurrency regulation in the US as the November elections approach.

The US Securities and Exchange Commission (SEC) filed a lawsuit against an individual connected with the issuance and promotion of the Saitama Inu (SAITAMA), according to a complaint released recently.

This legal action follows a series of joint enforcement initiatives launched earlier this month. The SEC, the Federal Bureau of Investigation (FBI), and the Department of Justice (DOJ) charged multiple cryptocurrency entities suspected of fraud and market manipulation.

SEC Pushes Misleading Investors and Pump-and-Dump Allegations

The complaint, filed in the US District Court, alleges that the defendant, Vy Pham, illegally sold unregistered securities in the form of digital tokens. It also accuses Pham of misleading investors and promoting Saitama Inu through deceptive tactics. Some of the cited deceptive practices include fraudulent statements about the coin’s value and prospects.

According to the SEC, Pham leveraged social media channels to promote the meme coin. He artificially inflated the value of Saitama Inu and ultimately profited at the expense of unsuspecting investors. Advertising a strong community backing and future utility, Pham reportedly promised substantial returns to investors.

However, the SEC contends that Pham’s promotional efforts were part of a “pump-and-dump” scheme, a form of securities fraud. In such schemes, the promoter hypes up the asset to boost its price, only to offload its holdings at inflated rates. This leaves other investors with significant losses as the token value crashes.

“Pham misled investors by making grand promises of wealth, and as a result, many individuals lost significant amounts of money,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division, in a statement.

Read more: How Does Regulation Impact Crypto Marketing? A Complete Guide

This lawsuit is part of a wider crackdown initiated on October 9 by the SEC, FBI, and DOJ against four cryptocurrency entities. Citing Gotbit Consulting, ZM Quant Investment, and CLS Global, the coordinated enforcement action centers on allegations of fraudulent activities and market manipulation. These are tactics used to deceive investors by fabricating market demand.

Potential Implications for the Future of Meme Coins

Meme coins, unlike Bitcoin or Ethereum, typically lack intrinsic utility or clear use cases, making them highly volatile. They are often subject to rapid price fluctuations, driven by social media trends or endorsements from influencers.

This lawsuit reflects the SEC’s ongoing efforts to ensure compliance with securities laws in the growing cryptocurrency market. The SEC is committed to fighting against fraud, misleading information, and market manipulation. This is as more retail investors flock to digital assets.

“The cryptocurrency market continues to grow, and with it, the risks to investors. The SEC will continue to take action against those who violate securities laws, no matter how new or innovative the assets may be,” Grewal added.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

Meme coins can be entertaining and lucrative for some. However, they also come with significant risks, especially when manipulation is in play. The outcome of the SEC’s case against Pham could have far-reaching implications for the future of meme coins.

The court ruling in favor of the SEC could set a legal precedent, bringing stricter regulations on similar digital assets and their promoters.