Americans are no longer sure they can trust cryptocurrencies following the collapse of FTX. If both retail and institutional investors had shown real interest in cryptocurrencies, the trust capital was dented by FTX. This article aims to summarize the contrary opinions of several Americans concerned.
The renewed debate on the relevance of cryptocurrencies
The financial history of cryptocurrencies is now marred by the collapse of one of the biggest exchanges: the collapse of FTX. The case took a surprising turn this week with the arrest of Sam Bankman-Fried, the former CEO of FTX. The congressional hearing that was meant to examine how the event happened without Sam Bankman-Fried now in jail. It is clear that the audience provided very few answers. The hearing, however, poured gasoline on the fire that is the cryptocurrency debate.
Brad Sherman is a congressman who campaigned for the banning of cryptocurrencies. Since the FTX affair, he is one of those who wants to revive the debate around crypto. He explains that he is the only member of the House to have obtained an F from the only cryptocurrency promotion organization that rates members of Congress. He considers Sam Bankman-Fried not to be a big snake in the Garden of Eden that crypto would be, but that the entire crypto community is a garden of snakes.
Crypto trader Scott Melker’s response
For Mr. Sherman, there is no reason to want a different currency. According to him, the dollar is already quite strong. The existence of cryptocurrency could only be justified by the desire to escape tax. Conversely, according to Scott Melker, Sam Bankman-Fried is a criminal and it is not related to the crypto industry. It has nothing to do with actual assets or asset class. It is simply fraud. It would therefore be dishonest to claim that it is because of crypto. Nevertheless, it is clear that confidence will be difficult to rebuild in the months to come and must start with regulation. It could take years.
Some consider that the reason the trust existed in FTX in the first place was artificial. It had been constructed by SBF claiming that it had the Commodity Futures Trading Commission behind it, which is another regulatory agency. It primarily covers commodities, but has struggled to cover cryptocurrencies as well, as it does forex.
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