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Buterin, Mow, and Song Give Their Take on FTX Collapse

Buterin, Mow, and Song Give Their Take on FTX Collapse
Buterin, Mow, and Song Give Their Take on FTX Collapse

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Crypto industry leaders are sharing their thoughts on the collapse of the FTX cryptocurrency exchange. While speaking at a recent crypto-focused conference in Argentina, some industry leaders opined that the collapse of FTX was due to “human error,” while some believed that it was caused by the mismanagement of the company.

Industry leaders weigh in on FTX collapse

The CEO of Pixelmatic and JAN3, Samson Mow, said that FTX was a company that created a worthless coin, like Terra LUNA. This token created a $4 billion gap in the company, prompting the executives to look for ways to fill the gap.

According to recent reports, the former FTX CEO, Sam Bankman-Fried, sent around $4 billion worth of FTX funds to support Alameda Research. The FTT token has significantly been affected by the demise of FTX. FTT has plunged by 92% over the past week, and it was trading at $1.70 at the time of writing.

According to Mow, the company co-founders were “grifters” that maintained an “artistic” image of professional individuals. He also added that the top executives at the FTX exchange usually mingled with regulators. Bankman-Fried was one of the largest donors in the recent US election cycle, having donated over $70 million for campaigns.

Mow also adds that the collapse of FTX had ignited a debate about centralization and decentralization, with a large amount of attention on security. He added that one of the greatest lessons that could be learned from the FTX fiasco is the ease at which people trust someone with all their money instead of custodying the money themselves.

The collapse of FTX has ignited discussions on the importance of self-custody wallets. These discussions have seen Trust Wallet’s native token, TWT, rally to a new all-time high. Unlike exchanges where a user custody their assets with an exchange, wallets allow users to control their funds, making them less risky.

Some projects will succeed others will fail

The co-founder of Ethereum, Vitalik Buterin, has also weighed in on the matter. According to Buterin, more than 90% of everything in the web 3.0 & crypto space was junk. Therefore, it was expected that some projects would fall while others would remain standing.

Buterin also addressed the FTX collapse on Twitter, saying that it was a fraud that cut deeper, given that FTX touted itself as one of the most compliant players in the space.

The CEO of Binance, Changpeng Zhao, also recently shared similar thoughts, warning that more businesses and projects would fall. Zhao withdrew from an offer to acquire the FTX exchange, saying that FTX issues were beyond Binance’s control. According to Zhao, more businesses would be affected by the ripple effects stemming from FTX’s collapse.

Buterin has also addressed the importance of coding in a transparent manner, referring to Ethereum and tokens created on the blockchain. However, the issue of whether Ethereum is centralized or decentralized has been contentious, with the crypto community arguing that Ethereum has some level of centralization.

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