Funding agency Paradigm continues to be optimistic about crypto’s potential following the collapse of FTX. “The blowup of FTX has prompted some to query crypto’s worth. However the points at FTX are exactly ones that decentralized finance [defi] can resolve via elevated transparency and safety,” the agency’s co-founder emphasised.
Paradigm on FTX Collapse, Defi
Paradigm co-founder Matt Huang took to Twitter to elucidate the affect cryptocurrency alternate FTX’s collapse has on his firm. Paradigm is a San Francisco-based funding agency targeted on supporting crypto and Web3 firms and protocols.
“We’re shocked by the revelations about FTX, Alameda, and SBF,” he started. FTX and buying and selling agency Alameda Analysis filed for Chapter 11 chapter final week. Each firms had been based by Sam Bankman-Fried (SBF), who has stepped down because the CEO of FTX.
“Info are nonetheless coming to gentle, and there shall be many classes to study,” Huang added, elaborating:
We really feel deep remorse for having invested in a founder and firm who finally didn’t align with crypto’s values and who’ve executed monumental injury to the ecosystem.
“Paradigm’s fairness funding in FTX constituted a small a part of our whole belongings and has now been written right down to $0,” the co-founder detailed.
“We by no means traded on FTX and didn’t have any belongings on the alternate. We have now by no means been buyers in associated tokens equivalent to FTT, SRM, MAPS, or OXY,” he clarified.
Huang was beforehand a accomplice at enterprise capital agency Sequoia Capital, which additionally lately marked its FTX investments right down to $0. The VC agency famous that “a liquidity crunch has created solvency danger for FTX.”
The Paradigm govt emphasised:
The blowup of FTX has prompted some to query crypto’s worth. However the points at FTX are exactly ones that decentralized finance can resolve via elevated transparency and safety. Crises equivalent to this one assist to make clear the true deserves of what we’re all constructing in the direction of.
“The approaching weeks and months shall be a troublesome time for crypto, however we stay optimistic about crypto’s potential and are dedicated to constructing in the direction of the optimistic future we all know it might allow,” he concluded.
Kraken CEO Jesse Powell mentioned the injury to the crypto trade is big and can take years to undo. Binance CEO Changpeng Zhao has in contrast the FTX fiasco to the 2008 monetary disaster. He warned of cascading results from the rival alternate’s collapse. Former U.S. Treasury Secretary Larry Summers in contrast FTX to Enron.
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