Tuesday, July 23, 2024

Vitalik Buterin offers cryptocurrency lessons in wake of FTX crash


Speaking in the aftermath of the FTX crash, Ethereum co-founder Vitalik Buterin offered his thoughts and some positives from one of the largest cryptocurrency black swan events.

In an interview conducted by Bloomberg on November 20, Buterin said that the collapse of FTX contains lessons for the entire crypto ecosystem.

he is He confessed That the underlying stability of the distributed ledger and the technology that powers the crypto-asset economy has never been called into question. The problem in this case (and many before it) was people, not technology.

Buterin also called the collapse of FTX a “great tragedy” but added that it reaffirms the position of many in the Ethereum community regarding centralization:

“However, many in the Ethereum community also see the situation as vindication of the things they have believed all along: anything centralized is the suspect by default.”

He added that this spirit includes trust in an open, transparent, superhuman symbol. Over the weekend, Buterin posted a dossier Instructs To obtain a “CEX safe” with proof of bankruptcy.

Instead of relying solely on “legal methods” such as government licenses, auditors, corporate governance, and background investigations of the people who run the exchanges, the exchanges could create “crypto evidence that shows that the funds they hold on-chain are sufficient to cover their liabilities to their users,” he said.

It is understood that problems with FTX arose from the exchange using customer deposits for other purposes. After a large influx of withdrawal requests to the exchange earlier this month, it found itself unable to fulfill the withdrawal request with its current liquidity.

See also  Microsoft, Visa, First Republic, Amazon, Exxon Mobil, and more stocks to watch this week

Related: The FTX fiasco means imminent consequences for cryptocurrency in Washington, DC

Vitalik Buterin isn’t the only industry leader who has recently spoken out about the implications of FTX. On November 17, Binance CEO Changpeng Zhao He said Although regulation is essential, it is also very important for players in the industry to lead by example.

During the Indonesia Fintech Summit 2022, Zhao said that the entire FTX saga is likely to be out there Crypto industry setback By “a few years,” and you’ll likely see regulators scrutinizing the industry “to be honest a lot more, which is probably a good thing.”