SEC chairman has likened FTX to Luna, stating that crypto investors need more protection
During his recent appearance on CNBC’s Squawk Box show, SEC boss Gary Gensler came under question about the agency’s investigation into the FTX situation.
He also named three stones that can drag a crypto exchange down to the bottom and destroy it.
The Three Things That Destroy FTX, Per Gensler
Gary Gensler reminded host Andrew Sorkin that he cannot disclose anything about the SEC’s current investigation into FTX. However, he did share some more interesting things.
He reminded Sorkin about the collapse of Terra Luna and then of several crypto lending platforms, likening FTX to those and saying that they are all interconnected.
He believes the sad situation with FTX is as old as finance, and it was down to three things – “a bunch of customer money,” “non-disclosure” and “leverage” as FTX described it. had borrowed against the money of his customers.
There are a few concentrated players in the crypto space, Gensler stated, and FTX was one of them. As it and its token began sinking, the crypto space got an electric shock. Bitcoin falling below the $18,000 level was one of its consequences. Besides, a lot of investors lost money not only on the FTT token but also on other cryptos falling in price.
Overall, Gesler said investors need a lot more protection in this area than they do now.
