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ETH Co-founder Discusses Crypto Lessons in the Aftermath Of The FTX

  • In an interview, the ETH co-founder shared his views regarding FTX collapse.

  • Vitalik Buterin remarked that the failure of FTX has proven once again that the problem lies in people, not technology.

21-Nov-2022 By: Divya Behl
ETH Co-founder Discu

Vitalik Buterin, co-founder of Ethereum, spoke about 

in the aftermath of the FTX meltdown, offering his opinions and some positives from one of crypto's biggest black swan events.

Buterin stated in an interview with an American media outlet on November 20 that the collapse of FTX had lessons for the whole crypto industry.

He agreed that the basic stability of distributed ledger technology and the technology that powers the crypto asset system is not in question. The issue in this case (and others before it) has been people, not technology.

Buterin also called the FTX crash a "major tragedy," but stated that it reaffirmed many in the Ethereum community's stance on centralization:

“However, many in the Ethereum community regard the scenario as a validation of what they have always believed: centralized anything is by definition suspect.”

He went on to say that this ethos includes putting open and transparent code ahead of humans. Buterin issued a guide to having a "secure CEX" with documentation of insolvency over the weekend.

He stated that rather than relying solely on "fiat methods" such as government licenses, auditors, corporate governance, and background checks on exchange operators, exchanges could create cryptographic proofs demonstrating that the funds they retain on-chain are adequate to meet their liabilities to their users.

The exchange's troubles are believed to have resulted from the exchange's usage of consumer deposits for other purposes. Following a massive inflow of withdrawal requests earlier this month, the exchange found itself unable to service withdrawal demand with its present liquidity.

Vitalik Buterin is not the only industry figure who has recently spoken out about the FTX debacle. On November 17, Binance CEO Changpeng Zhao stated that while regulation is required, industry leaders must lead by example.

During the Indonesia Fintech Summit 2022, Zhao stated that the FTX debacle has likely set back the crypto sector by "a few years," and that authorities will likely analyze the industry "much, much harder, which is probably a good thing, to be honest."

What do you think about Ethereum co-founder Vitalik Buterin's opinions? Share your views in the comment section below.

Read also: Michael Saylor criticized over Bankman-Fried remark

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