Hilary Alen, law professor at the American University and finance expert, has called for the banning of cryptocurrency for creating more risks than rewards in the market, citing the massive FTX fraud and the absence of crypto’s inherent value.
Photo Insert: Crypto was described as "manna for fraudsters."
The implosion of FTX was the most spectacular in a series of cryptocurrency industry collapses that started in the spring of 2022, Allen argued. It exposed the basic flaws in the crypto industry.
The root of the problem is that cryptocurrency assets can be created at no cost and without limit, and an unlimited supply of assets makes a system more vulnerable to booms and busts.
Since crypto has nothing behind it, it becomes manna for fraudsters.
“As Sam Bankman-Fried awaits trial, US policymakers need to limit the harms associated with crypto technologies and business models. At the very least, they should not loosen existing laws in the name of fostering cryptocurrency innovation. But they should also consider a more serious measure: Banning cryptocurrency assets outright,” Allen argued.