The commissioner made it clear she does not support bailouts for anyone in the crypto industry, arguing it's better to “let these things play out.”
Securities and Exchange Commission (SEC) commissioner Hester Peirce has spoken out against crypto company bailouts, arguing it’s actually better to “let these things play out,” to create a more sustainable industry.
Peirce, the most pro-crypto commissioner for the United States SEC, told Forbes that the recent crash in crypto, though painful, is separating strong companies from the weak.
“When things are a bit harder in the market, you discover who's actually building something that might last for the long, longer term and what is going to pass away,” she said.
The commissioner made it clear she did not support bailouts for anyone in the crypto industry, particularly those that mismanaged risk and became over-leveraged.
“Crypto does not have a bailout mechanism [...] I don't want to come in and say that we’re going to try to figure out a way to bail you out if we don't have the authority to do it. But even if we did, I would, I would not want to use that authority, we really need to let these things play out.”
Peirce’s comments come as the crypto industry is still reeling from the recent market crash, with many companies and projects cutting staff or shutting down altogether.
The motive behind the bailouts could be positioning for future takeovers as the industry matures and stronger players emerge. It could also be deception, to make it seem like the SBF is taking action to help, when in reality, they are only positioning themselves to hold, the monopoly of the crypto Markets.
In an Article we assessed on Coin Telegraph, The suggestion is, that Crypto whales came to the rescue.
The core of our investigations suggests the recent and ongoing collapse of the crypto markets, were caused by the same whales and liquidity providers, that are being advertised as saviours. What was not clear, was why. Is it to simply stop other players entering the market, or Could it be, to position the market, in such a state, that it wipes out the competition or better yet, allows a takeover by a simple bailout proposal, with the intention of taking control, All leading to a simple finality, SBF becoming the JP Morgan of Crypto.
Were is satoshi now, to see, what's happening to his vision of crypto and blockchain trading.
Suggesting FTX and Alameda Research founder Sam Bankman-Fried is taking a different approach and has been stepping in to rescue crypto companies struggling due to the market crash. Is like suggesting the world bank, resolved global hunger, when it was established. Our advice to readers, is to be cautious of motives. We are in this together. Crypto has been about, decentralization and no single dominance, by any single player.
The suggestion came only days after Alameda Research agreed to give Voyager Digital a 200 million USDC loan and a “revolving line of credit” of 15,000 Bitcoins (BTC), worth $446.3 million at current prices, to be used “if needed to safeguard customer assets.” The question to be asked is, on what terms.
Bankman-Fried told NPR on Sunday that this is something he and his companies have done “a number of times in the past” to “stem contagion” amid a cascade of falling crypto companies. When investigating previous positions such as Liquid exchange, The loans or bailouts pushed the company into the hands of SBF, with major accusations, that liquid was an example of how exchanges should not be run, This didn’t stop SBF jumping on the opportunity to acquire the company. For a whopping 9 figure price. From the outskirts one must observe the tactics of takeovers through bailouts.
What is certain, is that these bailouts are not in the best interest of the crypto industry or its investors, when the result is a monopoly of the entire crypto platforms . Infact what is less certain, although believed to be true, Is the same whales, market makers and Exchanges, Who destroyed millions of lives, are the ones who ultimately benefit.
What we do know, is that SBF has the ability to manipulate the market, as has been seen during the past few years, We have heard many accusations of SBF companies and other Whales and exchanges, intentionally destroying market conditions. With SBF motive that is still unknown, the dangers of one man or a few men, Holding the control, of what was designed to be a decentralized trading platform, is detrimental to the entire crypto space. We are seeing the birth of a Crypto Cartel
In an interview with Bloomberg on Wednesday, Anthony Scaramucci, founder of SkyBridge Capital called the FTX CEO the “new John Pierpont Morgan,” in reference to the Wall Street financial baron who pledged his own money and convinced others to do the same to shore up the banking system during the 1907 Bankers’ Panic. This we can agree on.
“He is bailing out cryptocurrency markets the way the original J.P. Morgan did after the crisis of 1907.”
Peirce argues however that the downturn can be a valuable learning opportunity for market participants and regulators to see how the market moves in times of stress.
What Anthony Scarmucci didn't mention, was the position, this gave JP Morgan and the creation of an elite banking division. The entire point of decentralized networks and crypto trading was to shift away, from such power-bearing individuals.
The market turmoil has already badly affected lending platform Celsius Network and crypto-focused hedge fund Three Arrows Capital (3AC), which is facing insolvency after incurring roughly hundreds of millions in liquidations tied to the ongoing collapse of Ether’s price. All that can be done now, Is to wait and watch carefully, with the hope, that the world and authorities, will wake up and realize a perfect storm is brewing.