US Senator Elizabeth Warren claims that unless there is regulation for crypto, it will ruin the US economy.
Elizabeth Warren linked the FTX scandal to all cryptocurrencies, suggesting the latter could spell disaster for the economy. She therefore issued a public appeal to the authorities to regulate the entire cryptocurrency market.
In a recent op-ed for The Wall Street Journal, Elizabeth Warren compared cryptocurrencies to the mortgages, penny stocks, and credit-default swaps of 2008. With this comparison, Warren suggested that a similar result to that of 2008 could befall us for the US economy as regulators not intervene.
While it is true that the FTX scandal has aggravated the financial industry and beyond, many have reacted negatively to the senator’s position. You could say it’s natural to react negatively when the Senator associates FTX with the entire crypto industry.
For example, many pointed out to the senator that regulation is a necessity for centralized exchanges, not decentralized exchanges. Moreover, FTX did not fail due to cryptocurrencies’ flaws. It failed because of certain individuals, such as SBF.
Shortly after Elizabeth Warren’s op-ed, Changpeng “CZ” Zhao tweeted about what could happen to the cryptocurrency market. While he did not respond directly to the senator, he acknowledged that the industry can experience setbacks like any innovation. However, he then said that the cryptocurrency market could come back stronger than ever in the coming years.
The US Senator’s stance on cryptocurrencies
A week ago, Elizabeth Warren publicly asked SBF for documents related to FTX that would explain the current situation, which many saw as a good thing for the crypto community. Nevertheless, Warren remains against cryptocurrencies, believing that decentralization has major flaws. She has already said that DeFi is dangerous for the United States.
Finally, she believes that cryptocurrencies are responsible for money laundering and other crimes. However, the senator does not acknowledge that cryptocurrencies, when regulated wisely, have proven to be very effective and can only improve the global economy. Bitcoin (BTC) originated in 2008 during the financial crisis. Many who have studied bitcoin believe it could be a solution to the malfeasance that centralized institutions such as banks have previously inflicted on the US economy.
The senator also failed to mention that it was these legal authorities that allowed people like FTX to engage in risky transactions freely, as the latter was one of the largest donors in the 2020 presidential election and of the 2022 midterm elections. These two donations include millions of dollars in support of the Democratic Party, of which US Senator Elizabeth Warren is a member.
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Mainly for this reason, many believe that the mainstream media is trying to cover up what is really going on in the cryptocurrency market. For example, another Op-Ed in the WSJ tried to link the SBF to Donald Trump. The Op-Ed also stated that the reason for FTX’s failure was that “supporters of Sam Bankman-Fried have lost faith in him”. And why not mention that SBF literally stole billions of dollars from its users?
The mainstream media also failed to mention that a few months ago people like Terry Duffy warned against FTX and even questioned the CFTC and Congress about SBF’s approach to the crypto industry. He publicly called SBF a “fraud”, but authorities took no action. It is these authorities who choose to remain ignorant when it is not convenient for them. Watch the video for more information:
The New York Times has also come under fire for writing a “puff piece” involving FTX. Fortunately, the crypto community isn’t so dumb as to not see it. Even people like Elon Musk responded.
Nevertheless, if Warren and his ilk can continue to blame the crypto market when authorities themselves have no control over companies like FTX, it is only natural for the crypto community to react.
Now more than ever, people need to differentiate bitcoin and decentralization from centralized exchanges and all that entails. As for Elizabeth Warren and her position, a call to action is in order. Regulation is a necessity, but not for bitcoins. Regulation is a necessity for centralized entities working with cryptocurrencies.
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