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Pantera Capital’s CEO says FTX’s collapse was not caused by blockchain failure.
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In a letter to investors, Dan Morehead said there is a need for trustless systems in the ecosystem.
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Business in the blockchain space is moving back to safe entities, Morehead added.
Blockchain shouldn’t be blamed for FTX’s collapse
Cryptocurrency exchange FTX collapsed in November following the mismanagement of customer funds by Sam Bankman-Fried and his executives. Since then, the news of the collapse has dominated headlines, with regulators and legislatures in the United States currently talking about the best way to regulate the market.
However, while commenting on the event, Pantera Capital’s CEO, Dan Morehead, said FTX’s collapse doesn’t mean that blockchain technology has failed.
In a letter to investors a few days ago, Morehead said blockchain didn’t fail. He added that there are regulated entities in the cryptocurrency space that are still working. He said;
“There are exchanges like Coinbase, Kraken, and Bitstamp that, when a client sends money to them, they just put it in a bank. The solution is pretty straightforward. The narrative that blockchain skeptics and some regulators and politicians are pumping out misses the point. The collapse of FTX had nothing to do with blockchain technology. It’s not crypto that failed. Bitcoin and all the other protocols worked perfectly.”
In addition to centralised crypto exchange, Morehead added that decentralised protocols are still working fine. The Pantera boss pointed toward decentralised exchanges like Uniswap, 0x, 1inch, Balancer and Dodo, stating that they continue to work fine.
Safe entities are now attracting businesses in the space
Morehead added that business in the cryptocurrency space is now going to safe and secure companies. Cryptocurrency companies need to be audited to ensure that their finances are fine. The Pantera Capital CEO said;
“Regulated, transparent, onshore, and/or audited exchanges are seeing a dramatic increase in market share. This is essentially getting back the customers who fled to offshore exchanges for more assets/potentially unregistered securities offered to trade, more leverage, and lower fees. Since October, the market share of exchanges like Coinbase, Kraken, Upbit, and Bitstamp has increased 30 percentage points.”
Morehead added that he hopes the trend continues as that would ensure the growth of the broader cryptocurrency market.