Last Updated on November 13, 2022 by Bitfinsider
The unexpected decline of FTX exposed the need for measures to safeguard investor funds from manipulation and misdirection. Vitalik Buterin, the co-founder of Ethereum, believes that what FTX did was a greater scam than the infamous Mt. Gox and Terra crashes.
Buterin argued that the operators of the Mt. Gox and LUNA ecosystems “looked” shady and did not attempt to clean themselves sufficiently to alter investor perceptions. Buterin then stated that “FTX was the opposite and did full-on compliance virtue signaling.”
While virtue signaling relates generally refers to the public demonstration of one’s good character, Binance CEO Changpeng “CZ” Zhao expressed disappointment in FTX for misappropriating user cash, which, according to him, has set the industry back several years in terms of regulatory acceptability and mainstream usage.
Buterin went out against FTX CEO Sam Bankman-Fried, citing the detrimental repercussions of FTX’s misconduct. However, Buterin also believed that Sam, as a person, deserved support around him, and added, “I hope he has friends and family that can give it to him”
Regardlessly, not everybody was willing to cut some slack for the ailing entrepreneur. The developer of Dogecoin, Billy Markus, argued that SBF also deserved jail time, an opinion that resonated with tiny investors who recently lost money.
To prevent a situation similar to FTX, the cryptocurrency community has begun proactively cross-checking cold storage money and seeking clarifications for on-chain abnormalities.
The community recently questioned Crypto.com’s plan to move 320,000 ETH from an internal cold wallet to Gate.io. However, Crypto.com CEO Kris Marszalek stated that the cash were delivered by mistake to a Crypto.com-owned whitelisted account on Gate.io.
“If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away,” said CZ.
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