"In the aftermath of the collapse of FTX, authorities should resist the urge to create a parallel legal and regulatory framework for the crypto industry. It is far better to do nothing, and just let crypto burn. Actively intervening would convey undeserved legitimacy upon a system that does little to support real economic activity. It also would provide an official seal of approval to a system that currently poses no threat to financial stability and would lead to calls for public bailouts when crypto inevitably erupts again. Finance is all about trust. The loss of trust from surging failures already is bringing about crypto’s demise. The market capitalization of the myriad “coins” is down by about 75 per cent from its November 2021 peak."
Next time the Wall Street banks are overleveraged in bad mortgages, CDOs, credit default swaps and other crappy derivatives and are teetering on the brink and begging to the Fed for a bailout: Let it burn. No more taxpayer money for bailouts and executive bonuses.
