Jesse Powell, the founder and chairman of the cryptocurrency exchange Kraken, reacted to the FTX crash on Twitter and suggested that the crypto community needed to stop being so trusting and strengthen its standards.
In a 14-Tweet thread, Powell appeals to the entire crypto community, including investors, venture capitalists, and regulators, warning them to spot warning signs and remove such individuals from the industry before it’s too late.
Trust but Verify
Powell’s main emphasis was on the crypto community’s trustworthy, morally upright nature.
Due to the nature of cryptocurrencies and blockchain technology, those who work in the field have a strong urge to innovate for the better and provide true assistance.
Powell also said that it made the community vulnerable to con artists, even ones who make their financial greed visible from the beginning.
These people, as Powell described, don’t hesitate to “sell us out for their own interests” while “we let clowns ride under our banner.”
Negative Crypto Sentiment Could Last 3 Years
Powell stated that the past three months have been extremely difficult for the crypto industry in reference to the Terra-LUNA catastrophe in May.
All Bitcoin critics will consider the collapse of a crypto exchange to be a gift, and it will strengthen their arguments against cryptocurrency. Powell stated that it will take years to change public perception of cryptocurrencies.
Venture Capitals At Fault Too
Powell then lost it and lashed out at venture capital firms, accusing them of failing in their “duty to be critical and withhold undue praise.”
Powell outlined nine warning signs regarding FTX that the venture capital firms ought to have taken notice of.
Red flags include FTX appearing as though it understood everything despite joining the fight eight years later than planned, spending nine figures on “ego” acquisitions like securing political influence or negotiating relationships in the sports world, and FTT.
Finally, Powell called attention to American lawmakers, asserting that they shared some responsibility for the FTX catastrophe. He said that they refused to provide a “workable regime under which these services could be offered in a supervised manner.”
As a result, Powell claims, companies like FTX were forced to relocate to offshore locations, which is what led to how things are now. Rather than “wrongly focusing on convenient, on-shore good actors,” as they presently do, Powell suggested that policymakers should pay attention to off-shore trades.
Powell reassured the community that Kraken wasn’t subject to FTX or FTT in his closing remarks. He remarked that the Kraken put survival before profit and extended his sympathies to anyone who had been impacted by the latest turn of events.
Image Courtesy Of Shutterstock
