Former U.S. Treasury Secretary Larry Summers is likening the collapse of troubled cryptocurrency exchange FTX to the meltdown that engulfed Houston-based energy company Enron two decades ago.
In an interview with Bloomberg Television’s “Wall Street Week,” Summers said regulators ought to draw a few lessons from the FTX episode. One is the need for “more forensic accountants” to help detect issues at both the corporate and national level, he said.
The swift collapse of FTX was underscored on Friday by the company’s announcement that it had begun Chapter 11 bankruptcy proceedings in a Delaware court and that its chief executive, Sam Bankman-Fried, had resigned. John J. Ray III, the lawyer who was brought in to clean up the mess left at Enron, was appointed to succeed Bankman-Fried. The announcement rattled the cryptocurrencies sector, where the price of Bitcoin
BTCUSD,
touched a two-year low after FTX’s announcement.
