Davos 2023: While talking at the World Economic Forum being held at Davos, Switzerland, the people from the crypto community were seen shrugging off their hands from FTX and its former boss Sam Bankman-Fried.
Brad Garlinghouse, the CEO, of Ripple, told CNBC at Davos 2023 that people consider the FTX to be a crypto problem, however, if we get into the depth of it, it is not. He tagged the FTX case as fraud and money laundering. Also, people should not pretend it is a crypto problem.
Garlinghouse also described Ripple‘s personal exposure to the defunct crypto exchange. On Wednesday, he said that FTX had received a 10 million USD XRP lease from Ripple, which they utilized for a variety of FTX-related expenses.
Since the market reached its pinnacle at a combined value of 3 billion USD in November 2021, the crypto industry has seen almost 2 billion USD lost from its total market cap.
FTX, failure of an institution?
Rene Reinsberg, the co-founder of Celo, during a CNBC-hosted panel on Thursday, said that FTX was a failure of an institution and of people. This should be differentiated from the technology of crypto.
While recognizing that FTX has tarnished the image of the crypto industry, Jeremy Allaire, CEO of Circle, told CNBC in an interview on Tuesday said that many people backed FTX and now they are facing the backlash.
Organizations should be properly run, well-financed, highly regulated, have excellent audits, and have solid control. According to him, these all things matter while running a global financial institution. If not, they are going to come under a lot more scrutiny and people will begin to pay more attention to that as opposed to simply accepting it as a fairy tale, added Allaire.
Also read: Ripple Opposes SEC’s Backer Redactions; Will Watchdog Reply?
FTX being compared to the biggest investment fraud
Garlinhghouse went on to compare the FTX case with Bernie Madoff, who is accused of having done the biggest investment fraud crime in the U.S. He said that people had not reported the case to SEC and the SEC simply overlooked it, hence, not restructuring regulations on hedge funds.
According to him, other asset classes have also suffered large losses, thus it would be dishonest to single out cryptocurrency in estimates of investor losses from hazardous assets in 2022. He mentioned of top U.S. technology equities which also took a beating.
2 trillion USD was lost last year between Facebook, Amazon, and Tesla. No one is arguing about investments in those businesses, Garlinghouse said.
Also read: Crypto Giant Genesis To File For Bankruptcy As Early As This Week
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