Speaking on CNBC’s “Closing Bell” Thursday, Peter Smith deemed the collapse of crypto exchange FTX as “a tragedy and total failure of governance.”
Blockchain.com’s CEO and co-founder noted that crypto investors need to get back to the drawing boards and keep their assets in their own hands. Private keys.
“Crypto is one of the very few assets in the world that you can custody yourself, and I think we’re going to see folks increasingly move back to that model as well as move to a model of trusting regulated companies in the space.”
He also added:
“The ultimate reality and the coolest part of crypto is that you can store your funds on your own private key where you have no counterparty exposure.”
According to Blockchain.com CEO, various measures will be taken to address the liquidity crisis that FTX faces.
A trend towards regulated cryptocurrency institutions is the norm. Crypto investors will also be more aware of corporate structure.
Smith pointed out that FTX was very popular among Silicon Valley-based groups. It did not emphasize the cryptocurrency economy much. He said:
“This was very much a Silicon Valley momentum play, and we’ve seen that very clearly not work out.”
Analysts believe Coinbase is one of the main beneficiaries when more attention is given to regulated crypto entities.
Blockchain.News reported that proof-of reserve is also gaining popularity in the crypto space. It aims to increase transparency.
A proof-of reserve uses a Merkle tree or Hash tree to verify data, synchronisation and integrity. “What is Proof-of-Reserves? A third party audit that verifies that the custodian is holding the assets it claims. A snapshot of all balances held is taken & aggregated into a Merkle tree, a privacy-friendly data structure encapsulating balances,” Crypto exchange Gate.io explained.
Changpeng Zhao, Binance CEO (CZThe proof-of-reserves trend was initiated by (). It would encourage more transparency in crypto-exchanges by pointing to their digital asset holdings.
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