The BSC News team members give their takes on the recent FTX collapse and its ramifications across the crypto industry.
Thus Spoke the BSC News Team
If you haven’t been living under a rock, surely you have heard of the collapse of FTX, one of the largest crypto exchanges in history. Every layer of the story that has been peeled back unveils something crazier and almost unbelievable. One of the gems of the industry turned out to be one of the most criminal and nefarious groups in the history of finance.
The acting CEO of FTX, and expert in corporate bankruptcies, John J. Ray III, proclaimed in his first official filing:
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
With experience mitigating the fallout from Enron, Mr. Ray III’s powerful words mean that much more.
Without unraveling the story here, below, we hear from the BSC News team, who give their insights and takeaways from the catastrophic failure of FTX.
Patrick Brendel, BSC News Editor, based in the Cayman Islands, with a background in many aspects of journalism and an interest in blockchain and crypto:
”It’s easy to say with hindsight that the FTX empire was a house of cards on a wobbly table, making you wonder how major players in both crypto and TradFi entrusted such a significant amount of funds to SBF and his college chums. However, as rival exchanges like Crypto.com and Binance scramble to reassure their customers that they are nothing like FTX, saying they will soon have audited accounts to prove it, the most pressing question seems to be, how have those extremely basic accounting and accountability procedures been absent up until this time? It’s astounding, with billions of dollars of other people’s money at stake.”
Kamran Iqbal, COO and Co-Founder of BSC News, is based in the United Kingdom, has founded multiple crypto projects and has a passion for technology and blockchain.
SBF may in some peoples mind set the industry back a few years & caused uncertainty.. Yes its SH*T what happened, but the only thing that has been set back is price.. the tech, the future stays the same & the industry WILL move forward.
As time passes, this’ll just be a blip, everything remains the same, even with the huge amount of FUD.
The community & contributors has always grown overtime, yes we’ve picked a ton of people up on the way & dropped alot off, but we’ve always stayed on top.
Kabezo, BSC News Editor based in Connecticut with a background in traditional finance and investing, but a long history observing blockchain technology and crypto:
The failure of FTX is a failure of people, not protocols. All of the major blockchains remain secure and functioning smoothly as designed. But the fraud was breathtaking. Apparently, FTX did not even have an accounting department.
The situation is similar to other instances of frothy markets that led to crazy valuations, questionable risk management and pitiful due diligence.
None other than Jeff Bezos bought 54% of Pets.com, which went from IPO to bankruptcy in 268 days, vaporizing $300 million in investor capital along the way.
Lehman Brothers was wiped out by a $600 billion position in mortgage-backed securities backed by only about $25 billion in company capital.
Credit Suisse is currently undergoing a restructuring related to a $5 billion hit it took related to the unraveling of $20 billion hedge fund Archegos, in which Deutsche Bank, Morgan Stanley, Goldman Sachs, UBS, and Wells Fargo were also bloodied.
FTX is an unmitigated disaster. But good things can come of it, like the wave of enthusiasm for proof-of-reserves
Miracle Nwokwu, BSC News advertorial editor and crypto researcher based in Nigeria, with a background in several crypto content roles, and interests in market analysis and crypto’s ability to positively change the world.
I strongly believe the recent events will strengthen the industry. If decentralization is going to win long-term, a high level of transparency should be the bare minimum, which seems to have begun with proof of reserves. In addition, a live dashboard to track these reserves in real-time, and not just snapshots as we’ve currently seen will be a further step in the right direction.
Sergio Ramirez, a Sales Representative and Social Media growth expert at BSC News, based in California, has interests in blockchain, gaming, and travel.
The FTX collapse highlights, more than ever, the importance of true decentralization and distributed systems. In an industry with no agency or overhead, it is always important remain diligent and alert. As a whole, we need to move away from these CEXs and traditional fiat onboarding ramps. There’s always a better option
Tom Andrews, the voice of BSC News and social media extraordinaire based in the United Kingdom, has interests in all things tech, including 3D design, gaming, and making music.
I think what has been presented to consumers about why FTX collapsed goes a lot deeper than what appears on the surface. There are many very believable conspiracy rabbit-holes one can spend hours looking into. For example SBF’s mum, Barbara, runs a Democratic fundraising organization, and with FTX being the 2nd top donor to the Democratic party this in my opinion should raise flags. Aside from this though the need for more transparency within the centralised crypto industry has been bought to light and more people are realising the mantra ‘not your keys, not your crypto.’
Daniel Joseph, BSC News Sales Representative and NFT Partner Specialist, has several years of crypto experience in marketing and content development.
“While the collapse of FTX has been truly disastrous for not only the people affected, but the perception of Crypto as a whole, I believe we will look back on it in a few years as a net positive.
This will hopefully force a lot of companies to be more transparent and prevent the same happening on a much larger scale further down the line as the Crypto industry continues to mature.”
Kyle Heise, BSC News Director of Content, based in California with a background in diplomacy, linguistics, and technology and a penchant for meme projects.
“The FTX fallout has been mind-blowing, to say the least. The story is fitting for an Aristotelian tragedy; the sex, the drugs, the lies and deceits, it’s an all-encompassing calamity of massive magnitudes. There are so many takeaways from this catastrophe. First: can you really trust anyone in this space anymore? What SBF did makes you really double-check everyone you have trusted in the past. Then, does this mean we need more oversight? Regulators will probably say yes, but we have seen a massive response toward self-custody. Retail protection will likely put pressure on lawmakers to take action.
2022 has truly been a bloodbath. Ultimately, I think crypto will come out on the end other much for the better. The malefactors in the space are being drained out and there will be more transparency by the major players who remain. The fall of Mt. Gox was arguably more impactful to the industry because of its market share at the time, but it will take a helluva lot for crypto to convince the masses after this incredible episode. Good riddance to FTX and SBF, the world is a better place without them.
Rich, BSC News Quality Control Manager based in the Nederlands. With decades of experience in internet and IT development, Rich has interest in global market trends and blockchain technology.
“I think it shows that periodic audits of these companies are needed in order to see if reserves are good. I’m glad that I never signed
Source : bsc.news
Founded in 2020, BSCNews is the leading media platform covering decentralized finance (DeFi) on the Binance Smart Chain (BSC). We cover a wide range of blockchain news revolving mainly around the DeFi sector of the crypto markets. BSCNews aims to inform, educate and share information with the global investment community through our website, social media, newsletters, podcasts, research, and live ask me anything (AMA). Our content reaches hundreds of thousands of global investors who are active in the BSC DeFi space.