Former Treasury Secretary Lawrence Summers compares FTX's collapse to Enron's fraud. crypto cryptocurrency
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.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.
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.
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