Elizabeth Warren’s WSJ op-ed, which correlated the fall of the FTX to crypto ruining the entire economy, did not go unnoticed by the online crypto community.
Since the situation started to fall apart days before it filed for bankruptcy on November 11, the collapse of former crypto exchange FTX has left the entire sector in shambles. United States Senator Elizabeth Warren recently expressed her disapproval of the sector in an opinion piece.
According to Warren, the cryptocurrency market follows a “well-traveled route of financial innovation,” one that begins with exhilarating gains but ends with “crippling losses.” She made comparisons between it and 2008’s subprime mortgages, penny stocks, and credit-default swaps.
According to the senator, the events surrounding FTX should serve as a “wake-up call” for authorities to impose restrictions on the sector. Some people on Twitter agreed with the senator, stating that the cryptocurrency industry is nothing more than “smoke and mirrors” and that Warren has been attempting to alert the public for the entire time.
Although many have blamed her, claiming that authorities don’t comprehend the industry and sow panic with such remarks. There is opportunity for regulation when it comes to centralized exchanges, which are very different from the technology of cryptocurrencies and decentralized exchanges, one user pointed out a medium ground (DEXs).
The co-founder and CEO of Binance, Changpeng “CZ” Zhao, tweeted about the subject the next day without specifically mentioning the op-ed and stated that there is always failure where there is progress.
Many people in the community stated that this is the reset crypto needed in reaction to CZ’s tweet. Following the FTX affair, American regulators have been vocal in their concerns. U.S. senators sent a letter to Fidelity on November 21 requesting that it reevaluate its Bitcoin BTC ($16,442) offerings in light of FTX.
On November 16, Warren and Senator Richard Durbin made public a letter they had written to Sam Bankman-Fried and John Jay Ray III, the former and present CEOs of FTX. 13 requests for documents, lists, and information about the situation were included in the letter.
Over the past year, Warren has been a vocal opponent of the cryptocurrency sector. She has previously referred to decentralized finance (DeFi) as “dangerous” and been active in exposing questionable practices in the American crypto mining industry. These issues are covered in her most recent opinion piece, along with how cryptocurrency is used in ransomware attacks and money laundering.
