Wednesday, May 29, 2024
HomeCryptocurrencyEthereum's Vitalik Buterin: FTX Exchange Meltdown "Cuts Deeper" Than Terra (LUNA) Collapse

Ethereum’s Vitalik Buterin: FTX Exchange Meltdown “Cuts Deeper” Than Terra (LUNA) Collapse

It is no longer news that FTX, the once-thriving and popular cryptocurrency exchange founded by Sam Bank-man Fried, has collapsed, causing a massive decline in the price of its native token, FTT. This unfortunate incident has left many investors wrecked while also opening the door for rigid regulatory policies from the SEC and other related agencies.

In line with the meltdown of the FTX crypto marketplace in November, several top industry players like Ripple CEO Brad Garlinghouse, Cardano (ADA) founder Charles Hoskinson, Coinbase Chief Brain Armstrong, CZ Binance and Ethereum Co-founder Vitalik Buterin have shared their thoughts, revealing the corresponding setbacks the latest implosion case brings to the nascent space.

Ethereum Co-Founder Reacts on the FTX Collapse

Earlier this month, FTX exchange suffered liquidity crunches, which led to many other negative outcomes like the dumping of the FTT token while being a contributor to the overall crypto market turbulence. To add to the exchange’s woes, hackers infiltrated the crypto platform and stole funds amounting to about $380 million. In consequence, FTX exchange joined the list of crypto projects to file for bankruptcy including Three Arrows Capital (3AC), Celsius Network, and Voyager among others. 

Related: CZ Binance: “DO NOT Trade FTT Tokens. If You Have a Bag, You have a Bag. DO NOT Buy or Sell”

Reacting to this recent loss-inflicting incident that has caused a stir in the crypto market, Ethereum co-founder Vitalik Buterin stated that the FTX meltdown cuts deeper than the Terra blockchain collapse in May, as FTX did whitewash.

According to Buterin, other collapse cases like Terra (LUNC) and Mt Gox were not totally a surprise as they looked “sketchy”. Therefore, the FTX scenario is different given that the exchange whitewashed itself, completing full-on compliance virtue signaling.  

In a recent reply to a tweet that compared the FTX incident with the Mt Gox implosion that occurred in 2012, Vitalik Buterin wrote, “MtGox “looked” sketchy and never tried too hard to whitewash itself. Luna too. FTX was the opposite and did full-on compliance virtue signaling (not the same thing as compliance). The second kind of fraud cuts deeper than the first.”

While some believe that rigid regulatory policies could emerge to the point of cracking down centralized crypto marketplaces following the FTX collapse and leaving only decentralized exchanges, the Ethereum creator stressed that centralized exchanges still bring some advantages to the table that DEXes do not. To him, CEX abstinence does not make complete sense although centralization has done a lot of havoc on crypto investors. 

In response to the user who tweeted the question regarding CEXes and DEXes, Buterin said, “the CEX vs DEX narrative misses a key issue, that the two are substitutes for some services (cross-crypto trading, custody, sometimes leverage) but CEXes also function as a fiat-crypto gateway and (what we call) DEXes don’t.”


Follow us on Twitter, Facebook, Telegram, and Google News

Ndianabasi Tom
Ndianabasi Tom
Ndianabasi Tom joined the crypto and blockchain industry in late 2018. He is an all-rounded crypto journalist and content writer. At TimesTabloid, he covers the industry's latest news, developments, and other educational content. He is a graduate of Petroleum Engineering.

Latest News & Articles