US Senator believes that cryptocurrencies will destroy the economy

The collapse of the FTX cryptocurrency exchange has brought global turmoil to the digital asset industry. United States Senator Elizabeth Warren wrote an op-ed analyzing the consequences for the crypto industry if regulatory policies continue to leave much to be desired.

FTX’s collapse should be a wake-up call. the @SECGov, @TheJusticeDept & @USTreasury should use their expansive authority to crack down hard on crypto fraud. Congress must close loopholes & back up these financial cops on the beat with more resources.

My oped: https://t.co/ARdtun2pAb

— Elizabeth Warren (@SenWarren) November 22, 2022

Warren noted that the crypto industry is following a «well-trodden path of financial innovation» that begins with exciting rewards but ends with «significant losses.» She compared the situation with FTX to the 2008 crash, penny stocks, and credit default swaps. The senator said that what happened to FTX should be a «wake-up call» for regulators to enforce laws in the industry.

Twitter partially agreed with the official, although there were those who mocked the senator’s analysis, pointing out the imperfection of US regulators — allegedly, regulators «do not understand the crypto industry and only cause fear among market players.» One user pointed to a «golden mean» for government monitoring of the industry, noting that regulators have room to grow when it comes to centralized exchanges, which are quite different from cryptocurrency and decentralized exchanges (DEXs).

Centralized exchanges for crypto are a far cry from crypto the technology. Know the difference and only regulate the centralized exchanges. The risk is the centralized exchanges, not the crypto and not decentralized exchanges/finance. Crypto did not fail. SBF failed. SEC failed.

— Steve Westhoff (@SteveWesthoff) November 22, 2022

The next day, Чанпен Чжао" href="https://noworries.media/biography/chanpen-chzhao/" data-bio-id="3681">Changpeng Zhao, co-founder and CEO of Binance, joined the discussion, tweeting his own commentary on the topic, noting that where there is progress, there are always failures.

Some (including me) say this will «set the industry back a few years.» But thinking about it, this is natural. There will be failures with progress. Happened in regulated TradFi in 2008, after 70 years of development. The industry will recover quickly, and become stronger.

— CZ? Binance (@cz_binance) November 23, 2022

Back on November 16, Warren, along with Senator Richard Durbin, released a letter they sent to former and current FTX CEOs Сем Бенкман-Фрід" href="https://noworries.media/biography/sem-benkman-frid/" data-bio-id="3697">Sam Bankman-Fried and John Jay Ray III. The letter contained 13 requests for documents, correspondence, and reporting on the current situation at the crypto exchange. Throughout 2022, Warren was the main critic of the crypto industry. She has previously called decentralized finance (DeFi) «dangerous» and has been actively involved in exposing unfair cryptocurrency mining in the United States.