Cryptocurrency industry distances itself from Sam Bankman-Fried at Davos Forum

Cryptocurrency cryptocurrencies is also present in the Davos World Economic Forum. At the summit, some of the major players in the cryptocurrency industry sought to… distancing himself from Sam Bankman-Friedfounder and former CEO of FTX stock exchange bankruptcywho was accused of commit a fraud there harm the industry as a whole.

“In my opinion, FTX is now drawn as a cryptocurrency problem. I think if you peel enough layers off the onion, it’s not really a “crypto” issue. The real problem is that it is a fraud and I don’t think we should pretend it is something else.“, he pointed out. Brad GarlinghouseCEO of Ripple Laboratoriestoken developer ripple (XRP)which is currently trading at litigation with the Securities and Exchange Commission. (SEC), which will be resolved by mid-2023.

Other important personalities participated in the round table organized by “CNBC”. Rene Reinsbergcrypto exchange co-founder Zealwho defined the collapse of the Bankman-Fried platform as a “institutional failure”. “It is important to make a difference. The collapse of FTX is a failure of institutions and individuals, not of technology (blockchain).” , did he declare.

Executives at Davos acknowledged the impact of the FTX debacle on the company’s bottom line. The reputation of “cryptos”.although they pointed out that the market will now focus on well-managed companies.

” I believe that people who supported FTX made a fool of themselves.. I think, at the same time, it’s going to take a closer look at companies that are well run, well capitalized and well regulated. Those who have strong audits, strong controls.all the things that matter if you run a global financial institution. People will start paying attention to this instead of believing in fairy tales. explained Jeremy Allaire, CEO of Circle, the issuer of the USDC stablecoin.

Garlinghouse also compared Bankman-Fried’s actions in the FTX bankruptcy to those of Bernie Madoffthe mastermind behind the biggest Ponzi scheme in history, which US prosecutors estimate more than $60 billion was misappropriated from thousands of clients of his investment firm.

“We talk about it as a cryptography problem. But really, it’s just a cheat and I think in some ways it’s not that different from Bernie Madoff. When the Madoff affair happened, we did not completely revise our approach to the supervision and regulation of hedge funds.“, noted the CEO of Ripple.

Mr Garlinghouse also pointed out that it was “unfair” to highlight the heavy losses of the cryptocurrency sector in 2022, which ended the year with 2 trillion less market capitalization, while the declines in the tech sector were worse and much steeper.. “If you add up Tesla, Facebook, and Amazon, you’re sure to get $2 trillion in losses, and you’re sure to get $2 trillion in losses. No one is saying we shouldn’t continue to invest in these companies.” , did he declare.

“I think it’s clear that low interest rates had caused a lot of foam in the markets, and when the direction of interest rates changed in the spring of 2022, a lot of asset classes reset. Obviously we saw some bad actors in cryptocurrencies and that added to the contagion,” he added.

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