In the wake of the FTX collapse, the industry has seen a wide range of reactions. From careful assessment to panic and paranoia, all sides have been represented. However, fear-mongering was the approach taken by U.S. Senator Elizabeth Warren, in her recent attacks on the cryptocurrency industry.
Writing an op-ed for the Wall Street Journal, the politician once again showcased the misinformed perception of so many officials regarding the aftermath FTX. Thus, pointing their ire not at the man responsible, but at the industry as a whole.
Elizabeth Warren Warns Against Crypto
The downfall of FTX is a tragedy, unlike anything the cryptocurrency community has ever seen. It saw the devastation of one of the most reliable, centralized trading platforms on the market. Furthermore, it tarnished the legacy of Sam Bankman-Fried, its founder and former CEO.
That downfall, however, was the fault of no one but Bankman-Fried. As the former billionaire orchestrated a scandal that potentially lost billions in customer assets and lacked proper internal company controls. Moreover, it devastated the public’s trust in the industry as a whole.
It is this scandal that has led U.S. Senator Elizabeth Warren to issue an attack on the cryptocurrency realm. The government officially constructed an op-ed for the Wall Street Journal that stated her belief that unregulated cryptocurrency will “take down the economy.”
The Senator referred to the FTX debacle as “a wake-up call.” She urges Congress to “close loopholes” and back up “financial cops” in a Tweet. However, the statements don’t read like an expert warning of doom, but of misinformation prevailing in the public sphere.
For Warren, and others officially preaching the benefits of regulation, there is a clear misunderstanding of what occurred during the downfall of FTX. It was the centralized exchange that Bankman-Fried led that was corrupt, similar to the centralized establishments that they already regulate. She has yet to comment on decentralized exchanges, as decentralization — the backbone of blockchains — is something that politicians have yet to understand. Cryptocurrency is a multi-faceted industry, with a huge part of the industry relying on decentralized exchanges.