Elizabeth Warran’s WSJ op-ed, which associated the collapse of FTX, one of the most popular crypto exchanges, with crypto destroying the whole economy, didn’t go unseen by the virtual coin community.
Chairman of the Subcommittee on Economic and Consumer Policy, Raja Krishnamoorthi, wrote a letter on the 18th of November to John J. Ray, Chief Executive Officer of FTX’s crypto exchange and Bankman-Fried, the founder and operator of the said company demanding a veer of details concerning to its funds and plans to give back the money of their clients. It followed a similar letter on the 16th of November by United States Senator Elizabeth Warren and Richard Durbin looking for documents and answers.
The collapse of the previous cryptocurrency exchange FTX has had the whole business confused and alarmed since the condition started to unstitch days prior to declaring bankruptcy on the 11th of November. A new Op-ed from US Senator Elizabeth Warren showed an off-putting position toward the business concerning the collapse.
Warren, in its letter, says that the cryptocurrency business is on a well-worn way of financial innovation that begins with thrilling bounties and rewards but lasts in crippling losses. The respective senator compared it to a subprime loan of 2008, credit default swaps, as well as penny stocks.
According to a US senator, what took place with the FTX exchange must be a wake-up call to regulators to put into effect on the crypto industry.
On Twitter, a number of individuals agreed with the US Senator, posting a tweet saying that the industry of digital assets is only “smoke and mirrors” or intended to make people believe that something is being done or is accurate, and which she has been attempting to advise the people all along. Even if many people have pointed the blame back at her, telling regulators that are lacking information about the crypto industry and provoking fear with such remarks and statements.
According to one crypto user, he calls attention to a middle ground, saying there’s room for the rule regarding centralized exchanges that are many poles apart from the system of cryptocurrency and decentralized exchanges or DEXs.
Centralized exchanges for digital assets are conflicting from the system of crypto. Understand the disparity and control the centralized exchanges. The threat is the CEXs and not the digital asset and not DeFi or decentralized finance or exchanges.
Some trending tweet relating to this issue includes:
According to Steve Westhoff (@SteveWesthoff) November 22, 2022, he tweeted that cryptocurrency did not fail. SBF failed. SEC failed.
The next day, not explicitly referencing the op-ed, ChangPeng Zhao, also known as CZ, co-founder, and chief executive officer of Binance, tweeted, saying where there’s progress, there’s always a failure.
Many say this statement of the US Senator will set the crypto business back a couple of years. On the other hand, considering this is natural. There’ll be declines and failures with progress. Occurred in regulated TradFi in 2008, after more than seventy years of development. The crypto business will recover fast and quickly and become powerful and stronger.
— ChangPeng or CZ, co-founder of Binance, November 23, 2022 tweet
In reply to Chang Peng’s tweet, a lot of the community commented that a reset cryptocurrency was required.
United States regulators have been actively voicing issues following the scandal of FTX. On the 21st of November, United States Senators released a memo to Fidelity urging it to go back over its Bitcoin offering in the wake of FTX’s fall.
On the 16th of November, US senator Warren and other senators publicized a memo they sent to the existing and former officers of FTX exchange- John Jay Ray III and Sam Bankman-Fried. The memo has thirteen requests for documents, lists as well as answers about the condition.
US senator Elizabeth Warren has been the number one critic of the cryptocurrency business over the last couple of years. A month ago, Warren called decentralized finance risky and dangerous and had been set off to show indefensible practices in the cryptocurrency mining sphere in the United States.
Elizabeth Warren’s latest op-ed also points out those subjects, together with the role of digital assets in money laundering as well as ransomware attacks.