US Senator claims cryptocurrency will destroy the economy – the community responds

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(Commonwealth Union)_ Since the situation began to unravel days before it declared bankruptcy on November 11, the entire industry has been in upheaval as a result of the demise of former crypto exchange FTX. In light of the aftermath, United States Senator Elizabeth Warren published a fresh op-ed in which she expressed her disdain for the sector.

Warren stated that the cryptocurrency business is on a “well-worn road of financial innovation” that begins with spectacular benefits but ends with “crippling losses”. She compared it to subprime mortgages, penny stocks, and credit default swaps in 2008. The Senator stated that what happened with FTX should serve as a “wake-up call” to authorities to enforce industry regulations.

Some on Twitter agreed with the Senator, noting that the crypto sector is “smoke and mirrors” and that Warren has been warning the public for years. Some others have pointed the criticism back at her, claiming that regulators don’t understand the industry and instil fear with comments like this. One commenter suggested a medium ground, stating that there is potential for regulation when it comes to centralised exchanges, which are vastly different from crypto and decentralised exchange technology (DEXs).

The following day, without mentioning the op-ed specifically, Binance co-founder and CEO Changpeng “CZ” Zhao tweeted on the subject, noting that when there is growth, there is always failure.

Following the FTX affair, regulators in the United States have actively expressed their worries. On November 21, senators sent a letter to Boston-based multinational financial services corporation Fidelity, requesting them to reconsider its Bitcoin offers in light of FTX. On November 16, Warren and Senator Richard Durbin made public a letter they sent to FTX’s previous and present CEOs, Sam Bankman-Fried and John Jay Ray III. The letter had 13 requests for documentation, lists, and responses to the situation.

Over the last year, Warren has been a vocal opponent of the cryptocurrency business. She has previously labelled decentralised finance (DeFi) “hazardous” and has been involved in exposing unsustainable practises in the US crypto mining sector. Her most recent op-ed similarly addresses these issues, as well as the role of cryptocurrency in money laundering and ransomware attacks.

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