FTX collapse is not a failure of Crypto – It is a failure of SEC, Bankman-Fried and Centralized Finance

U.S. Congressman Tom Emmer says FTX’s collapse is not a failure of crypto but a failure of SEC Chairman Gary Gensler, former FTX CEO Sam Bankman-Fried, and centralized finance. “We need to get to the bottom of this. We need to understand why Gary Gensler and the SEC weren’t doing their job“, the legislator stressed.

Rep. Emmer says FTX’s fall is not a failure of the crypto.

U.S. Rep. Tom Emmer (R-MN) said Tuesday that the implosion of crypto-currency exchange FTX is not a crypto failure. Instead, he said it was a failure of centralized finance (cefi), Securities and Exchange Commission (SEC) Chairman Gary Gensler and former FTX CEO Sam Bankman-Fried.

The lawmaker tweeted:

FTX’s collapse is not a failure of crypto. It’s a failure with cefi, Gary Gensler, and Sam Bankman-Fried. Decentralization is the point.

In an interview with Fox Business on Tuesday, Emmer described the collapse of FTX as a failure of “business ethics“, from “government oversight” and “regulatory procedures“.

He then referred to reports that the SEC met with Bankman-Fried in March and worked to give special treatment to FTX. The lawmaker confirmed that his office is looking into the matter.

Emmer added that Bankman-Fried also pushed for “special treatment legislation through Congress“. However, when the former FTX CEO’s proposal was finally revealed, the crypto industry immediately raised multiple red flags. The lawmaker pointed out:

It seems Gary Gensler has failed to take on the bad guys.

The congressman pointed out that Gary Gensler was never around to deal with Celsius Network and Voyager Digital when they had to file for bankruptcy earlier this year, just as he wasn’t around to deal with FTX. Nor was he there to handle terra/luna when the crypto-currency crashed in May, Tom Emmer said.

Dealing with the wrong players “is exactly what he [Gensler] is supposed to do“, exclaimed the congressman, pointing out:

What is the regulator responsible for this doing, going after the good actors in the community and making backroom deals, it seems, with people who are doing bad things.

“We need to get to the bottom of this. We need to understand why Gary Gensler and the SEC weren’t doing their job“, stressed Congressman Tom Emmer. “We need to understand how this was allowed to get to the point where people and their economies are being hurt. This is exactly what the regulator is supposed to be dealing with.“

Lawmakers noted that regulators are going after decentralized finance (defi). “That’s not what this is about“, he warned, concluding:

This is not about the crypto industry. It’s about Sam Bankman-Fried. It’s about the regulator, Gary Gensler, and it’s about centralized finance, which needs to be put under a regulatory umbrella. Gary Gensler has done nothing to make this happen.

Tom Emmer is not the only one who has warned against centralized finance. Ethereum co-founder Vitalik Buterin has also stated that “anything centralized is by default suspect.“Paradigm investment firm co-founder Matt Huang explained, “FTX’s problems are precisely the ones that decentralized finance can solve through increased transparency and security.“In addition, Shark Tank star and Dallas Mavericks NBA team owner Mark Cuban said that recent failures of crypto-currency companies are not specific to crypto-currencies.

The Minnesota congressman has repeatedly criticized Gensler for his approach to regulation. In June, he criticized the securities watchdog for not regulating in good faith, stating that “under Gensler’s chairmanship, the SEC has become a power-hungry regulator.“