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The collapse of once a prominent crypto exchange FTX left bruising scars over crypto space. Many think of the instance to slow down the growth and push back the potential inflow. Ark Invest CEO Cathie Wood also registered similar thoughts on the aftereffects of the incident.
The crypto investor opined that the fall of Bahamian crypto exchange might leave the crypto market with severe damage unexpected to get treated again. She cited it to act as a potential reason to keep the institutional investors keeping distance from the space at length.
With FTX filing for bankruptcy under Chapter 11 Bankruptcy in November 2022, the overall crypto market started witnessing the aftershocks. From being once a leading crypto exchange in the world with billions of dollars worth valuation to losing most of it in a matter of days, this put the market within a sheer skepticism.
Founder and former CEO Sam Bankman Fried became famous and an influential figure all over the space citing the reason for his crypto exchange reaching to unimaginable heights too quickly. SBF was ornated with ‘White Knight of Crypto’ and ‘King of Crypto’ like titles. All of this, however, went on shredding all along following the FTX fiasco.
Wood thinks that the mishap that FTX met with would be the ‘final nail in the coffin.’ It will result in making some institutional investors keep their distance from the space. In addition, this will lead to make way for stringent regulations over the nascent market with a potential threat of it being lost.
The possibility of regulations that Wood raised concerns of seems to move towards becoming a reality. Many financial regulators and authorities across the world were already in the favor of regulating the burgeoning asset class. Now with the crypto exchange meeting with bad omen, the intensity only increased seeking scrutiny.
Earlier Democratic Senator Elizabeth Warren reported to call for crypto regulations. Moving steps ahead, she went out asking Fidelity for going back to 401K and crypto retirement propositions. In addition, she stated the crypto exchange fall is a wake-up call to hold accountable to the crypto industry and its executives. She said most of the industry is ‘smoke and mirrors.’
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
