Crypto elite seek to distance industry from FTX collapse

Crypto bosses say FTX’s downfall is not the same as the downfall of the crypto industry.

Crypto bosses have united at the World Economic Forum in Davos to condemn the recent FTX fiasco and clarify that it is distinct from the crypto industry as a whole.

Ripple CEO Brad Garlinghouse was among the most vociferous critics of the FTX saga, arguing that the collapse had inflicted significant reputational damage on the industry.

He also called the problem not a “crypto problem”, but a case of fraud. Garlinghouse insisted that what happened within FTX’s higher echelons should only be called that.

Garlinghouse has some reason to argue so, as former FTX CEO Sam Bankman-Fried’s colleagues and partners, Gary Wang who co-founded FTX and Alameda Research CEO Caroline Ellison, have both pled guilty and are working with authorities against Bankman-Fried.

Garlinghouse’s company is not unscathed – as indeed are very few companies in the sector – from the collapse.

In fact, Ripple had leased $10m worth of XRP to FTX. Understandably, Ripple, which has been fighting a legal battle of its own in the US, and is close to potentially winning it, is hoping to recoup these funds.

Celo co-founder Rene Reinsberg also spoke to CNBC and said that the FTX collapse was an example of two things – a failure of institutions and a failure of people and individuals.

She said it’s not the same as arguing that the entire technology is flawed or trying to completely destroy it because of what happened to the exchange.

There are silver linings in the clouds gathering around FTX’s case, as both Reinsberg and Ellison have expressed relief that regulators are now showing more interest in regulating the industry in a way that protects consumers but also allows businesses to operate based on specific and clear guidelines.

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Written by Alex


Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.

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