The implosion of FTX, Sam Bankman-Fried’s Bahama’s-based exchange is, by volume, one of the largest financial frauds in history. But despite it impacting more than one million people and with up to $10 billion of client money lost, so far, little has been said about the irony of this historic event.
Specifically, the fact that this failure has come from the crypto industry itself and not from the centralized banks which are often at the receiving end of the ideological ire of bitcoiners and crypto-heads.
In crypto’s defense, the problems that befell FTX weren’t down to a structural failure of the technology itself, but rather the result of outright fraud carried out by a major centralized exchange that secretly gambled with clients’ money.
The irony doesn’t end there, however. It’s highly likely that, with just a little more scrutiny and tougher enforcement, regulators could have seen this coming. These, of course, are actions that have been persistently opposed by crypto ideologues who believe that regulatory authorities, namely the Securities and Exchange Commission (SEC), are on a mission to destroy the space.
Unfortunately for them, it would appear that the SEC doesn’t need to destroy crypto because it’s doing a very good job of imploding by itself.
Do the Feds really want to destroy crypto?
Having inherited the SEC lawsuit against Ripple Labs and its founders for selling undeclared securities, SEC chairman Gary Gensler has been on the receiving end of constant criticism and accusations of being against crypto. But history presents a different record.
Indeed, in the corridors of government, there are doubtless technocrats and bureaucrats who believe that the FTX implosion was partly caused by Gensler’s soft approach to crypto. They may well be thinking that, had regulators been tougher, any fraud would have been discovered well in advance.
Some politicians had even fought openly for regulators to take it easy on the crypto industry. Among these was congressman Tom Emmer who, last March, penned a писмо to the SEC asking that regulators not “overwhelm” the industry with requests for information.
Source: https://protos.com/opinion-ftx-fall-stresses-centralization-vs-decentralization-debate/