Bitcoin News and Finance
Former US Treasury Secretary Larry Summers Compares FTX Collapse to Enron Fraud Skip to main content

Former US Treasury Secretary Larry Summers Compares FTX Collapse to Enron Fraud

Former US Treasury Secretary Larry Summers Compares FTX Collapse to Enron Fraud

Former U.S. Treasury Secretary Lawrence Summers has compared crypto exchange FTX to Enron, noting that the case is a classic fraud rather than the complexities of cryptocurrency regulation. He said the regulatory community ought to draw two lessons from the collapse of FTX.

Larry Summers Compares FTX to Enron

Former Treasury Secretary Lawrence Summers shared his view on the need for cryptocurrency regulation following the collapse of Sam Bankman-Fried’s FTX crypto empire in an interview with Bloomberg Television Friday. Summers served as the U.S. Secretary of the Treasury from 1999 to 2001. He is currently the Charles W. Eliot Professor at Harvard University.

“A lot of people have compared this to Lehman. I would compare it to Enron,” he began, elaborating:

The smartest guys in the room. Not just financial error but … whiffs of fraud. Stadium namings very early in a company’s history. Vast explosion of wealth that nobody quite understands where it comes from.

Enron was an energy company based in Houston, Texas. Its executives hid billions of dollars of debt from shareholders through multiple illegal accounting practices. The company filed for chapter 11 bankruptcy in December 2001, exposing massive accounting and corporate fraud.

“I think the regulatory community ought to draw two lessons from this. One, if we had a few fewer economists and quants and a few more forensic accountants running around, I think it would help us detect what was going on in countries and in companies. The more I watch, the more … forensic accounting seems to be important,” he detailed.

“The other is, I think, we ought to have a rule in everything that touches finance that everyone who has anything to do with it in a position of responsibility has to be entirely away from the office, away from their phone, away from any device and connection to the system for a week or two continuously each year. I suspect that would be very helpful in causing some of these problems to come to light sooner,” Summers further opined.

The former treasury secretary stressed:

This is probably less about the complexities of the nuances of the rules of crypto regulation and more about some very basic financial principles that go back to financial scandals that took place in ancient Rome.

FTX announced Friday that it has filed for Chapter 11 bankruptcy as users raced to withdraw their assets following the plunge of the FTX token (FTT). As part of the bankruptcy filings, John J. Ray III was appointed the new chief executive of FTX Group after Bankman-Fried stepped down. Ray was the lawyer brought on to clean up Enron.

What do you think about the comments by former Treasury Secretary Larry Summers about FTX’s collapse and his comparison to Enron’s fraud? Let us know in the comments section below.

Labels:

Comments

Post a Comment

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...
Post a Comment
Read more

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...
Post a Comment
Read more

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...
Post a Comment
Read more

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Post a Comment
Read more
Blogarama - Blog Directory