CTO Of Ripple Outline Important Lesson from FTX Collapse
CTO Of Ripple Outline Important Lesson from FTX Collapse.
Crypto markets have been shaken by an unprecedented event that has led to a wide variety of opinions regarding the collapse of FTX. In response to the collapse of the FTX exchange, Ripple’s Chief Technical Officer David Schwartz shared his thoughts.
One important lesson from FTX meltdown
In a lengthy tweet, the Ripple CTO outlined several lessons to be learned from the collapse of FTX and the resignation of its former CEO, Sam Bankman-Fried.
He started the tweet by saying, “ There are a few lessons that should be learned from the FTX fiasco, but there’s one important lesson that is really pretty obvious in retrospect and that I can say with total confidence will not be learned.”
According to him, if you hold billions of dollars of other people’s money for an extended period, the temptation to speculate will be irresistible if there are no verifiable checks to prevent such risk-taking.
Read More: Amazon to Produce a Miniseries of FTX Collapse Collaborating with AGBO Production
“If you hold billions of dollars of other people’s money for indefinite time periods, the temptation to speculate with those funds is irresistable if there aren’t verifiable checks that make such risk-taking virtually impossible, nothing else will be sufficient.”
The temptation is irresistible, Schwartz says
He further explained, “Regulation that punishes after the fact won’t catch it. Investor due diligence won’t either. Of course, many people will say that it could be, and likely is, happening, but they’ll be shouted down by accusations of sowing FUD or upsetting a system that is making people money.”
“This kind of thing will always happen unless it cannot happen,” he stressed.
According to him, “the temptation is irresistible” is one of the key lessons of FTX, but most people will intentionally avoid learning this lesson, among other things, because of “ the elephant in the room.”
The company filed for Chapter 11 bankruptcy on Nov. 11 and is currently being investigated by a number of authorities around the world.
Read More: Ex-FTX CEO, Sam Bankman-Fried (SBF) Will Be A Guest Speaker at NYT DealBook summit
A number of US government agencies are investigating the exchange, including the Department of Justice (DOJ), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC).
For more info regarding Crypto Alpha and NFTs Alpha. Always follow us on Twitter and Instagram.
