Every single bit of attention that the spectacular collapse of FTX has so far received is deserved. The owners of the formerly successful company are accused of engaging in shady business dealings using client money behind the scenes.
The 30-year-old founder of the insolvent cryptocurrency exchange, Sam Bankman-Fried, was extradited on suspicion of carrying out “one of the biggest financial frauds in US history.” In the meantime, Gary Wang and Caroline Ellison of Alameda, two of his former coworkers, pleaded guilty to several counts of fraud.
Even after the collapse went on for more than a month, FTX dominated the news sections of both traditional and crypto media. However, there have been equally harmful, if not more so, actions were taken by reputable businesses with sound financial standing that demand at least equal, if not greater, attention.
FTX Overshadowed Well Fargo’s Fraudulent Practices?
“Wells Fargo has harmed millions of American families with its rinse-repeat cycle of breaking the law.” Director of the Consumer Financial Protection Bureau Rohit Chopra stated the following regarding the entire incident. However, it appears that the “world” was more focused on the harm caused by FTX, whereas billion-dollar scandals involving conventional goliaths like Wells Fargo did not receive the necessary attention.
Similar sentiments were echoed in a tweet from Ripple CEO Brad Garlinghouse that included an FTX meme.
Some XRP supporters even accused the SEC of choosing simple targets like the blockchain company Ripple rather than going after companies like FTX, which became known as a political megadonor, and Wells Fargo to protect customers from losing billions.
Wells Fargo Scandal
For those who are unaware, Wells Fargo was fined $1.7 billion by the Consumer Financial Protection Bureau, the largest civil penalty ever assessed by the organization. An additional $2 billion was levied against the bank for its role in the improper management of consumer loans for more than 16 million customers.
The CFPB Director referred to the fourth-largest bank in the country as a “repeated offender” and claimed that it had cost its clients billions of dollars in damage, including thousands of people losing their homes and cars. Additionally, the bank was charged with “wrongfully repossessing” cars, charging fees and interest on auto and mortgage loans fraudulently, and improperly allocating customer payments to auto and mortgage loans.
Even modifications to mortgages that the regulatory watchdog believed should have been approved were opposed by Wells Fargo. According to the CFPB, the bank allegedly knew about the problem that the refusal caused some borrowers to lose their homes before addressing it years later.
Wells Fargo had done a lot of serious harm, from charging customers with check and savings accounts erroneous overdraft fees, and other charges to misfreezing accounts.