Will crypto cause the collapse of the global economy?

Senator Elizabeth Warren just recently gave her opinion on the current situation in the crypto space, following the bankruptcy of FTX. She explained that the cryptocurrency industry is following the same pattern that led to previous financial crises. According to her, “crypto is no exceptionas his supporters want you to believe. Here is what the senator advises to save the world economy from disaster.

Regulators should be tough on crypto fraud cases

On November 22, the WSJ (The Wall Street Journal) published a editorial by US Senator Elizabeth Warren on crypto. This one was titled:Regulate cryptocurrencies or the economy will collapse“. On the same day, Senator did a post on Twitter with a link to his editorial. She said in her tweet: “FTX’s collapse should be a wake-up call“.

The senator urged the SEC, the Department of Justice and the United States Treasury Department to “use their extensive powers to crack down hard on cryptocurrency fraud“. She added that “Congress needs to fill the gaps and support these finance cops with more resources“.

Ms. Warren’s tweet

Furthermore, in his opinion piece, Warren explained that the spectacular collapse of the FTX exchange was shocking, but it was to be expected. Indeed, according to the senator, the crypto sector follows “a well-known path of financial innovations“.

She likened crypto to subprime mortgages that have “started with searing rewards“to end”by catastrophic losses“. For her, crypto is just deja vu and will only lead to the ruin of the economy.

The crypto community defends the new industry

Some Twitter users agreed with Senator Elizabeth Warren. In particular, they argued that crypto is just “powder in the eyes“. Some recalled that the senator has always tried to alert the public to the risks involved in the sector.

Nevertheless, many commentators disagreed with Warren’s opinion. The crypto community explained that regulators are unaware of what the industry stands for. She lamented the fact that they are instilling fear with posts of this type.

Senator Warren has often criticized the crypto sector, notably saying that DeFi is dangerous. For her, the bankruptcy of FTX should alert the regulators who must now activate to apply the laws on the industry.

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