The CEO of cryptocurrency exchange Kraken has outlined the impact of FTX’s failure on the crypto industry. After listing multiple red flags, the executive stressed: “The damage here is huge … We’re going to be working to undo this for years.”
CEO of crypto exchange Kraken on damage to crypto industry due to FTX failure
Jesse Powell, CEO of cryptocurrency exchange Kraken, shared his thoughts on the collapse of FTX in a series of tweets on Thursday. FTX filed for Chapter 11 bankruptcy on Friday.
“This is a massive setback,” he began. “Our good, trusting nature makes us easy targets for con artists … This isn’t about aiming high and missing. This is about recklessness, greed, self-interest, hubris, sociopathic behavior that causes a person to risk all the hard-won progress this industry has earned over a decade, for their own personal gain.”
Powell listed several FTX red flags. Referring to FTX’s former CEO Sam Bankman-Fried, who stepped down after the bankruptcy filing, Powell explained that the first red flag is “acting like you know everything after showing up to fight 8 years late. ” The second red flag is “9 fig buying political favors” spending. The third is “being too eager to please DC”, and the fourth is making “big ego purchases like 9-fig sports deals”. The next red flag is “a ‘media darling’ asking for puff pieces.” then there is also “ea” [Effective Altruism] Virtue Signaling” and the FTT token, he elaborated.
Powell opined: “We let clowns ride under our banner while they sell us out for their own interests. We give them power to speak for us but they haven’t earned that privilege. When they blow themselves up, it’s our house, our reputation, our people which bear the brunt of the damage.” The Kraken executive emphasized:
The loss here is huge. An exchange implosion of this magnitude is a gift to bitcoin haters all over the world…we’re going to be working to undo this for years.
“VCs, the media, the ‘experts’ failed,” he continued, adding that people “torched their own reputations” vouching for individuals, projects, and businesses they had not done proper due diligence on. “Retail looks to you, presuming that you have done your job. You have a duty to be critical and withhold undue praise,” he noted.
“Don’t trust. Verify,” the Kraken boss reiterated and elaborated:
US lawmakers and regulators also have some accountability. You ran this business abroad because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement unfairly focuses on convenient, on-shore good actors.
