The Collapse Of One Of The Largest Crypto Platforms Shows How Much Of The Industry Appears To Be “Smoke And Mirrors”: Senator Elizabeth Warren

• Senator Warren has called for a strict regulatory framework to be established in the crypto industry.
• Coinbase’s Brian Armstrong and Ripple CEO Brad Garlinghouse have also blamed a lack of regulatory clarity in the US as the main reason compelling exchanges to settle abroad.

Senator Elizabeth Warren has once again issued a statement calling for an aggressive regulatory stance towards the cryptocurrency industry. Warren took to Twitter to address the recent FTX debacle, further stating how she will continue to push the US Securities and Exchange Commission to establish proper laws and regulatory measures in the industry in order to protect consumers’ interest

Following the collapse of FTX, Elizabeth Warren has called for stricter law enforcement.

The collapse of one of the biggest cryptocurrency exchanges in the world FTX has raised several burning questions in its wake and has eroded consumers‘ faith in the industry. Several industry professionals, including Coinbase CEO Brian Armstrong, have blamed US lawmakers for not clarifying their stance on cryptocurrencies.

On November 10, Senator Elizabeth Warren, known for her anti-crypto stance, took to Twitter to share how the fallout of one of the biggest exchanges in the world shows that the industry appears to be “smoke and mirrors.”

“The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors.”

The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I’m going to keep pushing @SECGov to enforce the law to protect consumers and financial stability.https://t.co/uOPi8MV25J

She later called out for stricter US laws in the sector and shared that she will continue to push the SEC to enforce the law “to protect consumers and financial stability.”

In response to Warren, Brian Armstrong, CEO of Coinbase, took a stand and reverted back to her, stating how FTX was established offshore and was not regulated by the SEC. He later outlined how the lack of regulatory clarity in the US has compelled exchanges to take their business outside of US borders.

https://t.co/0HxlRiI6Sy was an offshore exchange not regulated by the SEC.

The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore.

Punishing US companies for this makes no sense.

Ripple CEO Brad Garlinghouse also responded to Warren’s post on Twitter, echoing Armstrong’s sentiments. Garlinghouse stressed how the sector is in dire need of regulatory guidance for companies that ensure trust and transparency.

@SenWarren, Brian is right — to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There’s a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US. 1/2

The Ripple CEO further stated how the US has no regulatory framework that often compels exchanges and entities to establish business abroad. He later cited Singapore as an example, adding that the city-state has already established a regulatory framework.

“They’ve done the work to define what “good” looks like and know all tokens aren’t securities (despite what Chair Gensler insists).” Garlinghouse the  shared 

On the other hand, the FTX-Binance deal, which was supposed to be finalised sometime soon, has been terminated. The Binance team took to Twitter to inform its users, stating that in light of the reports regarding mishandled customer funds and alleged US agency investigations, Binance will no longer pursue the FTX deal.

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.” Binance tweeted 

Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.

Image: Senator Warren/Twitter

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