Despite the significant FTX collapse, cryptocurrency and its protocols remain consistent. Crypto rules are transparent and can be audited by anyone. The government would have the public believe that the FTX will cause the ultimate fall of crypto — an ultimate agenda to keep finances in politically regulated institutions. The biggest takeaway from the FTX fallout should not be fear; it should be a call for further crypto development and less restriction to access the blockchain.
Millions of customers lost investments due to the enforcement of consumer use with popular lenders like BlockFi, who filed for bankruptcy after FTX blew up. Had the government not forced the public into dependence on these types of lenders, the crisis that trickled down to consumers wouldn’t be such a mess. In response to crypto fears, we can learn from blockchain companies not associated with FTX that reveal practices to ensure consumer protection and trust.
FTX's collapse is not a crypto failure. It's a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point. Watch below for more thoughts 👇 pic.twitter.com/VYacafc0ZD
— Tom Emmer (@RepTomEmmer) November 22, 2022
Exchanges are working hard to assure customers that they won’t meet the same fate as those who entrusted their investments with FTX and related companies. Binance, Crypto and Coinbase have released partial looks at their books for transparency and to let investors know it’s safe to store money with their companies. In contrast to FTX, the exchanges want consumers to understand that their investments are held in reserve, one-to-one.
Binance was a crucial player in the downfall of FTX as their commitment to transparency and proof of coins customers deposited were revealed to the public. Further, users choose which assets they hold based on trades with the company. FTX did not give investors the option to select their assets.
The collapse is a massive win for DeFi or de-centralized finance. DeFi uses computer code to build financial services for a major party. Many people prefer this finance version because there is no head of the exchange using customer funds to upgrade their lifestyle and no government involvement. Unfortunately, there is nothing in between DeFi and crypto, which means that a utopia where government power over money and finance does not exist is not yet in public reach. The collapse of the FTX is a significant indicator that government regulations for crypto abound.
