In a video update, Cardano founder Charles Hoskinson has had his say on recent events in crypto land. He thinks that the demise of crypto exchange FTX can get an ugly tail. According to him, this will lead to stricter regulations in the crypto industry than previously expected.
“Crypto has not failed”
Hoskinson does not believe the FTX fiasco was the fault of crypto itself. He believes the centralized side of crypto was to blame at this point.
“Crypto has not failed. People have failed. People in positions of trust. Ultimately, this all has to do with people putting their money into centralized exchanges and giving centralized companies confidence. That is exactly the industry we want to avoid with cryptocurrency. Unfortunately this will lead to new regulations Hopefully good regulations. But there is a good chance that this will not be the case.”
He also thinks that the damage FTX has caused will trickle down to other crypto companies, both directly and indirectly. FTX’s mistakes will lead to regulations that will affect all crypto companies.
“This is the tip of the iceberg. If you look at the financial relationships that FTX had, it could create an avalanche of bankruptcies. Unfortunately, crypto is not getting a financial lifeline. We have the privilege of cleaning up the mess ourselves and then being blamed ourselves.”
Crypto is going to have a tough time
He is optimistic about the future of the crypto sector in general and believes that “the best times are yet to come” for the sector. Despite that, crypto will struggle in the short and medium term.
“FTX is the straw that breaks the camel’s back. It changes, at least in the short and medium term, how crypto works in America. It mainly changes how legislators look at the sector.”
Hoskinson foresees, among other things, a situation in which custodial crypto wallets be banned and where all cryptocurrencies except bitcoin (BTC) are considered security (effect) are seen.
Earlier this week, Hoskinson indicated that the FTX crisis may be the last major hurdle for the crypto sector during this bear market. Although it can certainly leave a bad aftertaste, he thinks that the light at the end of the tunnel is in sight. It is not certain how far away the light is in the tunnel.
“I think this could be the low point, one of the last to deal with.”