Crypto Industry Struggles to Move Forward After FTX Collapse
The FTX stock market implosion shows how an industry built in the wake of the 2008 financial crisis has drifted away from its original ideals.
< p class="css-at9mc1 evys1bk0">Shortly after several Wall Street banks collapsed in 2008, a nine-page document circulated on an obscure mailing list proposing a new kind of financial system that would not rely on any "trusted third party". Party. ”The paper was the foundation of what became the cryptocurrency industry. Using radical and idealistic language, its supporters pledged to conduct their affairs in a transparent and egalitarian manner, rejecting the high-risk practices of a small number of powerful financial firms that caused the Great Recession.
But last month, the shares of a single crypto firm – the $32 billion exchange FTX – plunged the emerging industry into its own version of a style slump 2008. Once considered a safe marketplace for people to trade virtual currencies, FTX filed for bankruptcy after the crypto equivalent of a bank run, forcing executives, investors and industry enthusiasts to grapple with how a technology intended to correct the shortcomings of traditional finance ended up replicating them. .
Executives who just a year ago reveled in the seemingly unstoppable growth of crypto are now striving to prove they can learn from their mistakes and rediscover the first ideals of the industry. Binance, the world's largest exchange, announced last month that it would release more information about its finances and hire independent auditors to review those disclosures. Coinbase, the largest US crypto exchange, has proclaimed that it is committed to a "decentralized system where you don't have to trust us".
Many crypto advocates for more drastic reforms, urging investors not to hoard their digital assets with big corporations and instead turn to more experimental code-only platforms.
But despite all the promises of change, FTX's collapse shows how far the crypto remains from achieving its original goals and gaining widespread acceptance. Consumer distrust has grown this year amid steep financial losses, criminal investigations and an increasingly skeptical regulatory climate in Washington. At a conference last month, Changpeng Zhao, CEO of Binance, said the FTX implosion would set the industry back years.
The exchange's fall has compounded by months of losses in the virtual currency market triggered by
The FTX stock market implosion shows how an industry built in the wake of the 2008 financial crisis has drifted away from its original ideals.
< p class="css-at9mc1 evys1bk0">Shortly after several Wall Street banks collapsed in 2008, a nine-page document circulated on an obscure mailing list proposing a new kind of financial system that would not rely on any "trusted third party". Party. ”The paper was the foundation of what became the cryptocurrency industry. Using radical and idealistic language, its supporters pledged to conduct their affairs in a transparent and egalitarian manner, rejecting the high-risk practices of a small number of powerful financial firms that caused the Great Recession.
But last month, the shares of a single crypto firm – the $32 billion exchange FTX – plunged the emerging industry into its own version of a style slump 2008. Once considered a safe marketplace for people to trade virtual currencies, FTX filed for bankruptcy after the crypto equivalent of a bank run, forcing executives, investors and industry enthusiasts to grapple with how a technology intended to correct the shortcomings of traditional finance ended up replicating them. .
Executives who just a year ago reveled in the seemingly unstoppable growth of crypto are now striving to prove they can learn from their mistakes and rediscover the first ideals of the industry. Binance, the world's largest exchange, announced last month that it would release more information about its finances and hire independent auditors to review those disclosures. Coinbase, the largest US crypto exchange, has proclaimed that it is committed to a "decentralized system where you don't have to trust us".
Many crypto advocates for more drastic reforms, urging investors not to hoard their digital assets with big corporations and instead turn to more experimental code-only platforms.
But despite all the promises of change, FTX's collapse shows how far the crypto remains from achieving its original goals and gaining widespread acceptance. Consumer distrust has grown this year amid steep financial losses, criminal investigations and an increasingly skeptical regulatory climate in Washington. At a conference last month, Changpeng Zhao, CEO of Binance, said the FTX implosion would set the industry back years.
The exchange's fall has compounded by months of losses in the virtual currency market triggered by
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