Senator Elizabeth Warren, a member of the Senate Banking Committee and a longtime crypto-skeptic, has published an Op-Ed on WSJ.com, slamming the crypto industry and warning that crypto is poised to destroy the economy. The opinion follows a series of prominent crypto platform failures topped off by the FTX bankruptcy and allegations of financial fraud.
Senator Warren says that history is littered with “financial schemes promoted by criminals,” and crypto is no different.
“FTX’s implosion should be a wake-up call. Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure—before the next crypto catastrophe takes down our economy,” states Warren. “Crypto executives who break the law are just like any other crooks, and the Justice Department should use its full range of tools, including criminal penalties, against them. If Mr. Bankman-Fried and FTX executives committed fraud, then federal prosecutors should send them to prison. But FTX’s fall, like the collapse of Lehman Brothers before it, isn’t limited to one out-of-control company.”
Warren throws shade at the Securities and Exchange Commission, criticizing the agency for its inability to utilize its enforcement authority. The “[SEC] has fallen far behind as the crypto industry has drawn in millions of new investors.”
She continues to label crypto as a conduit to money laundering, criminals – like terrorist, drug dealers, ransomware perpetrators along with outlaw nations. In brief, there is nothing good here.
There is a well-earned pile on taking place in the crypto-sphere. The industry has been quick to tout its benefits and technology while skipping over the need for self-regulation and high standards of conduct. While the regulators have fallen short in providing bright line rules, industry participants have avoided leadership in the pursuit of quick gains to the detriment of all.
The impact radius of the FTX disaster is not yet fully understood. Expect more declarations like Senator Warren’s in the coming months.