Cardano founder Charles Hoskinson has warned investors that more pain is coming from the recent collapse of cryptocurrency exchange FTX. He also noted that the incident would attract more regulatory scrutiny.
In his latest YouTube video, Hoskinson argued that the collapse of FTX was not the failure of crypto itself but rather the loss of the flawed and centralized infrastructure around the platform.
“Crypto didn’t fail. People failed. People in positions of trust. At the end of the day, as much as we like to believe in the principles of cryptocurrency, this had everything to do with people putting their money in centralized exchanges and organizations entrusting centralized businesses to do something on their behalf,” he said.
He noted that the fallout of FTX will likely lead to increased scrutiny of the crypto industry. “There’s a very high possibility that the fallout of this will be new legislation, hopefully, decent legislation, but there’s a strong possibility that it won’t be.”
In an earlier video last week, Hoskinson claimed that the fallout of crypto exchange FTX might be among the last crises to hit the industry. But he noted that since these incidents have ripple effects on other ecosystem players, they are getting more and more complicated and hard to predict.
“I think this might be the bottom, one of the last ones to deal with. It’s going to be hard to predict how bad it will be, and it could certainly potentially be very bad. There are not many more firms that were like FTX or Alameda or like, Three Arrows Capital, and so forth,”
As reported, FTX announced that it filed for Chapter 11 bankruptcy in Delaware on Thursday, putting an end to its desperate scramble for investors to repair its balance sheet. Notably, FTX US, the US arm of the crypto exchange, has also been included in the proceedings, despite claims by the former CEO that their US exchange was fine.
Michael Saylor Expects More Regulatory Scrutiny
Notably, Hoskinson is not the only one predicting increased regulatory scrutiny. Former Microstrategy CEO Michael Saylor also believes the fallout of FTX will surely attract more regulatory scrutiny. However, he said if regulators move too aggressively in response to FTX’s implosion, it will harm the industry.
However, the Bitcoin bull argued that the flagship cryptocurrency and a “handful” of other coins would benefit from the collapse of FTX as it will eliminate thousands of useless cryptocurrencies.