Several industry players are hoping that the contagion of the most recent FTX fallout is limited, with optimism that the incident will serve as a wake-up call calling for greater regulatory scrutiny in the space.
Adrian Przelozny, CEO and co-founder of Australian crypto exchange Independent Reserve does acknowledge that the short-term impact of the event will invariably see increased volatility in the crypto space, and downward pressure on asset prices as the uncertainty of which market participants have exposure filters its way through the market.
“The key takeaway is that illiquid tokens should not be used as collateral for loans, especially if the token was issued by the same party taking out the loan,” Przelozny says.
Julian Hosp, CEO and co-founder of decentralised finance (DeFi) services platform Cake DeFi sees this event as one that will be used as a cornerstone to spark new crypto regulations, which will be good for the healthy development of the industry. “A more comprehensive regulatory framework has the potential to protect long-term investors from fraud and other risks,” says Hosp.
“My advice to crypto investors is not to speculate, expecting to make short-term gains. Instead, use these low prices for long-term investments,” he adds. “As always, the best approach to crypto is to do your own research, especially when it comes to tokens and platforms.”
FTX’s fall began on Nov 2 when crypto news outlet CoinDesk released an article on a leaked document displaying how Alameda Research, a hedge fund run by chief executive officer (CEO) of FTX Sam Bankman-Fried, held an inordinate amount of FTX’s tokens, or FTT.
This was exacerbated by crypto exchange Binance’s withdrawal of plans to acquire FTX on Nov 6, in light of “recent revelations.” The value of FTT as a result has since plunged with many traders pulling out of FTX.
On Nov 13, FTT was trading at US$1.86 ($2.55), down 97.7% from its all-time high of US$84.18 earlier in September 2021.
Meanwhile, CEO of Crypto.com Kris Marszalek announced in a tweet on Nov 10 that the company will be publishing its audited proof of reserves, in light of how “transparency is more important than ever” in the wake of FTX’s fall.
In his Twitter thread, Marszalek also notes that it is crucial for industry players to send a strong message to the world that trustworthy crypto platforms continue to exist, although he acknowledges that restoring trust will take time following this incident.
Subsequently, on Nov 11, Marszalek added in a separate Twitter thread that Crypto.com is also sharing their cold wallet addresses for some of the top assets such as Bitcoin (BTC) and Ethereum (ETH) on their platform.
“This represents only a portion of our reserves: about 53,024 BTC, 391,564 ETH, and combined with other assets for a total of approximately US$3 billion,” writes Marszalek, reasserting that the public can expect a full audited proof of reserves from Crypto.com in the next few weeks that will confirm the full 1:1 reserve of all customer assets.
Blockchain and smart transaction platform Chia Network has launched its Singapore headquarters on Nov 10. The new office will serve as the primary base for the company’s operations in Asia.
“Chia Network’s workforce is as distributed as the nodes on the Chia blockchain, and Singapore represents an opportunity for us to continue scaling our work globally,” says Chia Network chief operating officer Gene Hoffman.
The Singapore office is Chia Network’s third official corporate presence, following its North American headquarters and Swiss subsidiary.