Cardano (ADA) creator Charles Hoskinson warns that the FTX crypto exchange fiasco is likely to have negative implications for the digital asset industry.
In a new video, Hoskinson says that while the liquidity troubles facing FTX won’t directly affect the Cardano ecosystem, they will “cause issues” for the crypto industry.
“Effectively speaking, this [FTX’s insolvency] does not directly impact the Cardano ecosystem. But as members of the broader cryptocurrency space, this will likely cause issues for all of us.”
According to Hoskinson, FTX’s potential failure is likely to attract more scrutiny to the crypto industry.
“In particular, there is the case that FTX has been lobbying very heavily in Washington, D.C. Their failure could change the political landscape in unpredictable ways…
The issue here is that should we see more systemic failures, there could be a belief for more regulatory scrutiny or more draconian laws to be passed to enable that scrutiny.
The failure of FTX could result in that which could in turn badly damage the industry or in many cases offshore the American crypto industry. So this is not a minor event.”
On Binance’s reported intentions to acquire FTX, Hoskinson says that the collapse of the plan would be catastrophic for the crypto industry.
“It’s hard to know what’s going to happen next. If the Binance acquisition goes through, there’s a possibility that the markets can stabilize and that things will look good. Or at least calm. And we can move on and continue to heal as we were doing before this event.
If the acquisition fails, there’s a possibility that a series of cascading failures will occur and because of a lack of transparency, it is very difficult to know how deep these tentacles go. And it is entirely possible that other firms that were reliant upon FTX could also fail.”
Binance walked away from a deal to acquire FTX yesterday, according to a Wall Street Journal report.
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