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.
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.
“A lot of people have compared this to Lehman. I would compare it to Enron,” Summers reportedly said.
Enron is the once high-flying energy trading company that collapsed in late 2001 amid accusations of accounting fraud.
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