Who is Responsible For FTX Collapse? Ripple CTO Speaks Out
The fourth-largest cryptocurrency exchange in the world, FTX, crashed stunningly in just a few days. FTX and numerous connected firms have filed for bankruptcy, and its CEO and leader, crypto millionaire and figurehead Sam Bankman-Fried, also known in the industry as SBF, has now resigned.
This unexpected fall has sparked concerns about the viability of FTX and the larger crypto business and the possibility of a domino effect that could disrupt established financial markets. What exactly happened? How did FTX go from being an industry leader to a company in trouble? What does this signify for cryptography, then?
The FTX crash has been particularly painful for the cryptocurrency market at a time when traditional financial markets have seen a major recovery following news on lower-than-expected consumer inflation. Many people thought the crypto market would have experienced a similar increase if not for the ongoing self-inflicted crisis.
David Schwartz Speaks Out On The FTX Crisis
David Schwartz is the Chief Technology Officer at Ripple and one of the founding members of the XRP Ledger. Before joining Ripple, David Schwartz formerly served as WebMaster Incorporated’s Chief Technical Officer.
Valuable lessons to be learned from the FTX meltdown
After the most recent FTX meltdown, the cryptocurrency market is still battling to bounce back. However, David Schwartz, CTO of Ripple, has learned some important lessons from the FTX mishap. According to the Ripple CTO, Sam Bankman-Fried (SBF) is a terrible trader.
The chief technology officer of Ripple stated on Twitter that he thinks this crash will not teach us one crucial lesson. He continued by saying that incentives to speculate with large sums of money held over an extended length of time become overwhelming.
He asserts that nothing else will be sufficient if there aren’t numerous verifiable checks made during the procedure. The CTO of Ripple drew attention to laws and watchdogs that only punish after a crime has been committed and fail to discover it sooner. Investors won’t perform the analysis either, though.
Are investors doing this to make more money?
He continued by saying that professional investment organizations with access to the firms’ secret information were unable to determine this. While they made FTX investments totaling hundreds of millions of dollars, it appears like they intended to punish FTX users with this.
This suggests that they were overly drawn to the idea of making money. They funded the fraud during this endeavor, which helped it spread and attract new victims. Customers were unaware of what was going on behind the scenes.
All in all…
If institutional investors and regulators, two of the most significant members, had not strayed from their core values, FTX would not have reached this scale and burned out.