Blockchain didn’t fail, says Pantera’s CEO on FTX collapse
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Pantera Capital’s CEO says FTX’s collapse was not caused by blockchain failure.
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In a letter to investors, Dan Morehead said there is a need for trustless systems in the ecosystem.
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Business in the blockchain space is moving back to secure devices, Morehead added.
Blockchain should not be blamed for FTX’s collapse
Cryptocurrency exchange FTX collapsed in November following mismanagement of client funds by Sam Bankman-Fried and his managers. Since then, news of the collapse has dominated headlines, with regulators and lawmakers in the US currently debating the best way to regulate the market.
But while commenting on the incident, Pantera Capital CEO Dan Morehead said FTX’s collapse does not mean blockchain technology has failed.
In a letter to investors a few days ago, Morehead said that blockchain did not fail. He added that there are regulated entities in the cryptocurrency space that are still operating. He said;
“There are exchanges like Coinbase, Kraken and Bitstamp that, when a client sends them money, just puts it in a bank. The solution is pretty straightforward. The narrative that blockchain skeptics and some regulators and politicians are pumping out misses the point. The collapse of FTX had nothing to do with blockchain technology. It’s not crypto that failed. Bitcoin and all the other protocols worked perfectly.”
In addition to centralized crypto exchange, Morehead added that decentralized protocols still work well. The Pantera CEO pointed to decentralized exchanges such as Uniswap, 0x, 1inch, Balancer and Dodo, stating that they continue to perform well.
Secure units now attract businesses in the area
Morehead added that business in the cryptocurrency space is now going to safe and secure companies. Cryptocurrency companies need to be audited to ensure their finances are in order. The Pantera Capital CEO said;
“Regulated, transparent, onshore and/or audited exchanges are seeing a dramatic increase in market share. This is essentially bringing back the customers who fled to offshore exchanges for more assets/potentially unregistered securities offered to trade, more leverage and lower fees. Since October, the market share of exchanges that Coin baseKraken, Upbit and Bitstamp have increased by 30 percentage points.”
Morehead added that he hopes the trend continues as it will ensure the growth of the broader cryptocurrency market.
