As the cryptocurrency world is still reeling from the recent FTX collapse, one state attorney general has called for a ban on the legislation of crypto-friendly retirement.
After filing for Chapter 11 bankruptcy due to a lack of funds and customer demand, Founder Sam Bankman-Fried is no longer the company face of the crypto space.
“In light of current events, it’s no surprise that markets are struggling,” said Martin Hiesboeck, who is head of blockchain research at Uphold. “Historically, Thanksgiving has signified a time of growth for Bitcoin. However, after the FTX collapse and potential genesis bankruptcy, there is much more uncertainty surrounding investments this holiday season.” It was also seen many people panicked to sell USDT in Dubai and other parts due to that FTX event.
To our relief, he explained that inflation numbers have been declining in the U.S. as well as Europe’s inflation rate may have already peaked.
Hiesboeck stated that for anyone involved in the market, the FTX event and the consequences will be a hot topic of discussion this Thanksgiving, with possibly a negative outlook due to the bearish gravitas.
Vanishing of Cryptocurrencies
Although it may not seem like it, bear markets are a good time to take on projects that will have good outcomes in the long term, he explained. How people react and approach Friday’s stock market after hearing this news is yet to be seen.
Attorney General of New York ‘Letitia James’ called on Congress to pass legislation that must forbid retirement funds from investing in cryptocurrencies, digital tokens, digital coins as well as other digital assets. She cited the FTX fiasco and other crypto scams as reasons why such a law is necessary.
In addition, she demanded the Financial Freedom Act of 2022 and Retirement Savings Modernization Act be turned down. The act would stop the Labors from stopping investment in digital currencies if it passed. However, the Senate’s Committee on Education, Health, Labor, and Pensions has not taken any action on that proposed legislation yet.
James stated on Nov. 22 that “Losing all your money in a cryptocurrency crash could waste years of hard work and savings.” for those who invest their retirement funds in them. According to James, there are multiple pitfalls and dangers associated with cryptocurrencies, such as abnormal swings in their value.
In a statement, Scott said that if the legislation of crypto-friendly retirement happens, it “will provide savers with the plans to enhance their retirement savings by investing in alternative assets.”
Digital Currencies Worths Zero In Real World
James, who also plans to sue former President Donald Trump and the Trump Organization, said that “Americans who have worked hard their whole lives should not see their retirement savings vanish because of speculation with unstable crypto assets.
James stated that the prices for cryptocurrency fluctuate dramatically because people are speculating rather than investing in potential earnings.
Cryptocurrencies have grown in popularity over the past ten years, but their prices are not based on any sort of intrinsic value, she explained.
In the letter, James wrote how Mr Bankman-Fried described some aspects of the crypto industry as a Ponzi scheme.
“He stated that it is like building a box that serves no purpose. Obviously, this token has no value and is worth zero. But if people hold the belief that this token is now worth around one billion dollars, then that’s what individuals are willing to pay for it,” James’ letter said.
James explained that numerous cryptocurrencies bottomed out after the collapse of TerraUSD recently, which led to a half-trillion dollars being wiped out in value across the cryptocurrency market.
Crypto Enthusiast’s Reaction to It
One Twitter user thanked James for asking Congress to stop letting retirement funds invest in cryptocurrencies. They said that without this action, millions of Americans’ life savings could be gone in an instant.
The tweet said, “It is way too risky Unless there are strong laws to protect all Americans”.
Another tweet was more aggressive.
“The government is Trillion Dollars in debt, yet they think they know how to better manage our retirement funds?’ another person said. “That’s too much control, and I tend to agree with the left on most issues.”
James is amongst many state attorney generals who are suing Nexo Group, the parent company of crypto lender Nexo because they unlawfully offered interest-earning accounts to a few customers through unregistered securities.