On today’s show we’re going to ask a few questions about the spectacular collapse of FTX. A lot has been written about FTX in the past week. My goal is not to repeat what you might have already extracted from the Wall Street Journal, Bloomberg, or any of a host of outlets that have covered the story.

The investigations will turn up numerous revelations in the coming weeks and months.

One consequence that I see arising from this debacle could be an entirely new regulatory regime. We have heard the White House talk about the need to regulate Crypto currencies.

What happened at FTX was not a failure of regulation. If the reports I’m reading are true, they committed Fraud. Fraud is fraud.

It’s like saying funds need more oversight because of Madoff, and companies need more oversight because of Enron, and the US dollar can’t be trusted because many of these frauds were denominated in US dollars.

Bernie Madoff conducted the largest Ponzi scheme in history with losses in the tens of billions.

Theranos CEO Elizabeth Holmes was just sentenced to a bit more than 11 years in prison for her role in the fraud at the blood testing equipment company. You don’t hear the White House saying that there needs to be more oversight of blood testing equipment. That’s because blood testing was not the essential cause of the fraud. The company falsified results and misled investors.

These frauds will increasingly be used as a pretext for a US government backed digital dollar where each transaction happens under the watchful eye of government. The loss of civil liberty that results from this kind of government invasion of privacy will have profound social consequences. Do you find it acceptable that every time you hire a private limousine, order a beer at a pub, or purchase birth control at the drug store, all of these transactions are on display and subject to government scrutiny?

We don’t need more regulation as a result of FTX. Every time a major fraud is committed, there is this chorus of demands for more regulation, for greater government oversight. We don’t need laws on top of laws on top of laws. Enforcement of the laws we have is the key. Madoff Securities LLC was investigated at least eight times over a 16-year period by the U.S. Securities and Exchange Commission.

Yet somehow they failed to catch what was a flagrant Ponzi scheme and a fraud on a massive scale.