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The President of Jump Crypto, Kanav Kariya, has called out the former CEO of FTX, Sam Bankman-Fried. Kariya likened SBF to a “false messiah, adding that there was a need to create better trust in the crypto space.
Jump Crypto’s Kariya tweets about SBF
In a tweet published on Sunday, Kariya said that “FTX’s alleged fraud would have been seen as fraud 100 years ago. The fact that it’s surfaced in an industry predicated on abstracting trust is a cruel trick.”
1/ Can we trust each other?
It’s one of the fundamental questions that, after the still unbelievable demise of FTX, our industry is struggling to answer.
No, we can’t
Can we?
— Kanav Kariya (@KanavKariya) November 27, 2022
Kariya has also said that the collapse of FTX has increased the need to build a robust and fast trust layer. Since the collapse of FTX earlier this month, there has been a growing need for centralized exchanges to build user trust and transparency in the sector.
He added that trust was not more important than ever, adding that the consequences of lack of trust weighed heavily on the crypto market. He also opined that the lack of trust had more negative than positive effects, adding that low trust levels slowed innovation and progress.
He further noted that trust was a key factor that allowed society and entire sectors to achieve scalability. However, trust also carried a “long, arduous, and subjective process that doesn’t prevent infractions, but rather penalizes them.”
The cryptocurrency sector thrived on trustless systems. The space is popular for promoting privacy and anonymity. Participants in the sector need not know each other. Transactions are also processed without relying on a third-party service provider such as a bank or the government. Therefore, Kariya was concerned whether, after the unexpected collapse of FTX, the crypto industry participants would continue trusting each other.
Jump Crypto’s exposure to FTX
The collapse of FTX caused panic and anxiety across the crypto market as the community became skeptical about the crypto companies that had exposure to the exchange. Jump Crypto was among the firms that crypto community members believed were exposed to the collapsed FTX exchange.
However, on November 12, Jump Crypto remarked on the unfolding events surrounding the FTX exchange. In the tweet, the crypto firm was that its “exposure to FTX was managed in accordance with our risk framework and we remain well capitalized.”
Jump Crypto is adamant about proving that it is indeed liquid. The company will support the industry recovery fund announced by the Binance exchange. Jump Crypto and Aptos Labs will be contributing $50 million to the recovery fund.
Binance announced the launch of this fund a few days after FTX collapsed. The fund aims to support strong crypto firms affected by the persistent bear market. The exchange recently increased the amount of this fund to $2 billion.
While Jump Crypto shows that it remains solvent despite the FTX collapse, other firms exposed to the collapsed exchange have not been doing very well. The Genesis lending unit and BlockFi halted withdrawals citing exposure to the collapsed FTX exchange, and they are now seeking new funding.
Related
- After the FTX Crisis, crypto marketers are looking for a new sales strategy
- Binance Is Showing How It Won’t Go The Way of FTX – What Steps Has It Taken?
- FTX Owes $3.1bn to 50 Biggest Creditors
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