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Ripple CEO Says FTX Not A Crypto Problem At Davos 2023

  • When FTX attended the World Economic Forum, the cryptocurrency community labelled its collapse as a fake.

  • Garlinhouse went on to compare the FTX case to Bernie Madoff's, who is charged with committing the biggest financial fraud crime in American history.

20-Jan-2023 By: Sudeep Saxena
Ripple CEO Says FTX

The fall of FTX was dubbed a hoax by the cryptocurrency community 

When it was present at the World Economic Forum.

FTX and its former leader Sam Bankman-Fried were seen shaking hands with members of the crypto community as they were speaking at the World Economic Forum being held in Davos, Switzerland.

At Davos 2023, Ripple CEO Brad Garlinghouse told CNBC that although many people think of the FTX as a crypto issue, in reality, it is not. He classified the FTX case as money laundering and fraud. Additionally, nobody should claim that it is a crypto problem.

Garlinghouse also discussed Ripple's individual involvement with the shuttered cryptocurrency exchange. He claimed on Wednesday that FTX had leased 10 million USD worth of XRP from Ripple and had used the money for a variety of FTX-related costs.

Since the market's peak in November 2021, when it had a combined value of 3 billion USD, over 2 billion USD had been lost from the industry's entire market capitalization.

FTX: Institutional failure?

FTX was a failure of an institution and of people, according to Rene Reinsberg, co-founder of Celo, who made this statement at a panel discussion on CNBC on Thursday. This needs to be distinguished from cryptographic technology.

Jeremy Allaire, CEO of Circle, stated in an interview with CNBC on Tuesday that many people supported FTX and that they are now experiencing the backlash despite acknowledging that FTX has damaged the reputation of the cryptocurrency sector.

Organizations should be well-managed, financially sound, heavily regulated, have top-notch audits, and have reliable control. He claims that all of these factors are important when managing a large financial firm. If not, Allaire continued, they will be subject to a great deal more examination, and people will start to pay more attention to it rather than just dismissing it as a fairy tale.

The largest investment fraud is being likened to FTX

Garlinhouse continued by drawing comparisons between the FTX case and that of Bernie Madoff, who is accused of committing the largest financial fraud crime in American history. According to him, the SEC was not notified of the case and, as a result, did not restructure its rules regarding hedge funds.

He says that it would be dishonest to single out cryptocurrencies in projections of investor losses from risky assets in 2022 when other asset classes have already seen large losses. He listed the leading U.S. technology stocks that also suffered losses.

Between Facebook, Amazon, and Tesla, 2 trillion USD were lost last year. No one is debating making investments in those companies, according to Garlinghouse.

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