Regulate Crypto or It'll Take Down the Economy - Warren WSJ op-ed

[question everything]

The dramatic collapse of Sam Bankman-Fried’s crypto exchange, FTX, may have come as a shock to the Miami Heat, Tom Brady, Twitter bots and financial-news talking heads. But crypto is following a well-worn path of financial innovations, such as subprime mortgages and credit-default swaps, that began with dazzling rewards and ended with crippling losses.

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https://www.wsj.com/articles/regulate-crypto-or-itll-take-down-the-economy-fraud-reporting-know-your-customer-loophole-energy-disclosure-ftx-bankman-fried-ftx-11669123750 (subscription)

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I don't know the first thing about this topic to even select the most relevant paragraphs, so perhaps someone can post the archive story

[dalton99a]

1. Kick

https://archive.ph/zvE9O

Regulate Crypto or It’ll Take Down the Economy
Financial innovators always claim they don’t need oversight. They’re always proved wrong.
By Elizabeth Warren
Nov. 22, 2022 11:57 am ET

The dramatic collapse of Sam Bankman-Fried’s crypto exchange, FTX, may have come as a shock to the Miami Heat, Tom Brady, Twitter bots and financial-news talking heads. But crypto is following a well-worn path of financial innovations, such as subprime mortgages and credit-default swaps, that began with dazzling rewards and ended with crippling losses.

Proponents say crypto holds great promise for making the financial system more efficient and inclusive. Maybe. But we’ve heard that story before. History is littered with financial schemes promoted by criminals and charlatans who claimed that the latest and greatest tools had evolved beyond the need for regulation or a cop on the beat. During the 2008 collapse and every financial crisis before that, these claims have proved dangerously delusional. Crypto is no exception.

FTX’s implosion should be a wake-up call. Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure—before the next crypto catastrophe takes down our economy.

Crypto executives who break the law are just like any other crooks, and the Justice Department should use its full range of tools, including criminal penalties, against them. If Mr. Bankman-Fried and FTX executives committed fraud, then federal prosecutors should send them to prison. But FTX’s fall, like the collapse of Lehman Brothers before it, isn’t limited to one out-of-control company.

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[question everything]

6. Thanks

[canuckledragger]

2. From everything I've seen and read so far...

I think crypto is just a huge combination of ponzi/pump and dump scams, and maybe a dash of money laundering run by shysters and thieves. It's basically worth only what you convince others to put into it.

The way I think it goes is a conversion of real world currency into these digital bitcoin things and the crypto part being the combo of securing the funds and being able to escape scrutiny to a degree when depositing or using the funds to buy something. Hmm...whom would that kind of thing appeal to?

Also damaging to the environment given the power needed to 'mine' the coins that doesn't always come from a clean source, the cooling needed for the equipment along with causing problems for the locals because of the consumption, etc.

[OldBaldy1701E]

4. Wow.

I think crypto is just a huge combination of ponzi/pump and dump scams, and maybe a dash of money laundering run by shysters and thieves. It's basically worth only what you convince others to put into it.

Crypto? You just described the entire U.S. economy. But, no one wants to admit it.

[MichMan]

3. Whom is Sen. Warren directing this towards?

Last edited Wed Nov 23, 2022, 04:54 PM - Edit history (1)

Has she introduced a bill ?

[question everything]

5. Proposing at least. From the above

FTX’s implosion should be a wake-up call. Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure—before the next crypto catastrophe takes down our economy.