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He said there are important lessons to be learned. The meltdown of cryptocurrency exchange FTX, which he “can say with complete confidence,” will not be learned. Neither does investor due diligence.
His One Lesson Not Learned from the FTX Collapse
David Schwartz, his CTO at Ripple Labs, said in a series of tweets that cryptocurrency exchange FTX shared their thoughts on the collapse of Monday. FTX filed for Chapter 11 bankruptcy on November 11th.
While noting that some lessons should be learned from the FTX debacle, a Ripple executive said:
Key lessons learned he has one Very obvious in retrospect and can be said with complete confidence.
He explained: Virtually impossible and nothing else is good enough.
Schwartz emphasizes: Neither does investor due diligence. Of course a lot of people would say it could and most likely happened, but they say it’s sowing the seeds of FUD and disrupting the system that makes people money.
“This kind of thing happens all the time, unless it never happens,” he stressed. “The temptation is irresistible. This is one of the most important lessons of FTX. But most people actively choose not to learn this lesson, especially because there are elephants in the room.
FTX is currently being investigated by many authorities around the world. In the United States, the Department of Justice (DOJ), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC) are investigating exchanges for mishandling customer funds and other charges. The Turkish financial intelligence agency has also launched an investigation into his FTX, and the Bahamian securities regulator is trying to seize his FTX cryptocurrency.
Ripple Labs is currently engaged in a lengthy litigation with the SEC. Securities regulators have sued the company, CEO Brad Garlinghouse, and co-founder Chris Larsen over the sale ofXRP, arguing that crypto tokens are a security. Garlinghouse said he expects an answer in the first half of 2023. Ripple’s CEO recently said that the crypto industry will be stronger after the FTX debacle if it continues to focus on transparency and trust.
Image Credits: Shutterstock, Pixabay, Wiki Commons
