US Lawmaker: FTX’s Collapse isn’t a Crypto Failure — It is a Failure of SEC and Bankman-Fried Centralized Finance
U.S. U.S. Congressman Tom Emmer claims that the FTX meltdown was not a crypto failure, but a failure with SEC Chair Gary Gensler and former FTX CEO Sam Bankman Fried. “We must get to the bottom. The lawmaker stated that we need to understand the reasons Gary Gensler, and the SEC failed to do their jobs.
Rep. Emmer says FTX’s Fallout isn’t a Failure of Cryptography
U.S. U.S. Instead, he stated that it was a failure with central finance (cefi), Securities and Exchange Commission Chairman Gary Gensler and former FTX CEO Sam Bankman–Fried.
The lawmaker tweeted:
FTX’s crash is not a crypto failure. It’s a failure of cefi, Gary Gensler and Sam Bankman Fried. The point is decentralization.
Emmer spoke with Fox Business Tuesday and described the FTX meltdown in a further interview. He also referred to failures of “business ethics”, “government oversight,”and “regulatory procedures.”
He referred to reports that the SEC had met with Bankman Fried in March and was allegedly trying to give FTX special treatments. The lawmaker confirmed that his office was investigating the matter.
Emmer said that Bankman-Fried had also advocated for special treatment legislation through Congress. The crypto industry raised many red flags when the proposal of the former CEO of FTX was finally revealed. The lawmaker stressed:
Gary Gensler’s inability to deal with the bad guys is a failure.
The congressman pointed out Gensler wasn’t there to help Voyager Digital and Celsius Network when they filed for bankruptcy earlier in the year. He was also not there to help with FTX. Emmer also said that Gensler was not available to deal with Terra/luna after the cryptocurrency collapsed in May.
The congressman exclaimed that dealing with bad actors was “exactly what he [Gensler] should be doing,” and stressed:
What is the regulator responsible? It seems they are looking for good actors in the community and making backroom deals with people who are doing nefarious acts.
“We must get to the bottom. We must understand why Gary Gensler’s and the SEC failed to do their jobs,” Congressman Emmer stressed. “We must understand how this got to the point where people are losing their savings and their livelihoods. This is exactly what the regulator should be looking after.”
The lawmaker pointed out that regulators are pursuing decentralized finance (defi). He cautioned that this is not what it’s all about, concluding:
It’s not all about the crypto industry. This is Sam Bankman-Fried. It’s Gary Gensler, the regulator. It’s about central finance, which must be brought under a regulatory umbrella. Gary Gensler has not done anything to make this happen.
Emmer is not alone in warning against centralized finance. Vitalik Buterin, co-founder of Ethereum, said the same thing. “Centralized anything is by default suspect.” Matt Huang, co-founder of Paradigm Investments, explained that “centralized anything is by default suspect.” Mark Cuban, Shark Tank star and owner of the NBA team Dallas Mavericks said that recent failures in crypto companies are not crypto-specific.
Gensler’s approach to regulation has been repeatedly criticised by the Minnesota congressman. He criticized Gensler’s approach to regulation in June and stated that the SEC had become a power-hungry regulator under Chair Gensler.
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