FTX collapse – Paradigm co-fonder Matt Huang is still optimistic on Crypto

Crypto giants and popular crypto community members maintain a positive outlook on crypto.
Millions of FTX customers have lost their savings and investments.

One of the largest cryptocurrency exchanges FTX was drained of all customer deposits in seconds after it was discovered that Alameda Research had illegally used FTT, the native token of FTX as leverage to raise loans.

Matt Huang, co-founder of San Francisco based cryptocurrency investment firm Paradigm, explained on Twitter that Decentralized Finance or DeFi was totally capable of problems FTX faced.

“We are shocked by the revelations about FTX, Alameda, and SBF,” Huang tweeted. At press time, SBF’s whereabouts are unknown and a class action lawsuit was recently filed against the exchange. The suit has named celebrities who endorsed the exchange.

“Facts are still coming to light, and there will be many lessons to learn.”

“We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem,”

Huang added.

“Paradigm’s equity investment in FTX constituted a small part of our total assets and has now been written down to $0,” Huang reported.

“We never traded on FTX and did not have any assets on the exchange. We have never been investors in related tokens such as FTT, SRM, MAPS, or OXY.”

The executive emphasized:

“The blowup of FTX has caused some to question crypto’s value. But the issues at FTX are precisely ones that decentralized finance can solve through increased transparency and security. Crises such as this one help to clarify the true merits of what we’re all building towards.”

“The coming weeks and months will be a tough time for crypto, but we remain optimistic about crypto’s potential and are committed to building towards the positive future we know it can enable,” Huang added in the end.

Confidence: the only thing that can keep crypto alive

The likes of Michael Saylor and Salvadoran president have been vocal in their support for cryptocurrency, particularly Bitcoin. Essentially, the big wigs of the community are of the opinion that FTX is a bad Apple and that the technology is larger than market issues.

Investor confidence is everything when it comes to cryptocurrency because it derives its value purely from trust. The reason why industry stalwarts are optimistic and vocally supporting crypto is to maintain and increase that confidence. Ironically, Blockchain technology is based on the concept of a trustless system.

Several reasons are slowing mass adoption of crypto. The top reason is the lack of trust and extreme volatility. However, misguided enforcement might be the real reason crypto may not be adopted in the future. Unless regulatory authorities and lawmakers establish the rules of the game and define accountability in this space, crypto is never going to be adopted in the numbers that some industry CEOs predict. In fact, the vulnerability and slow policy development makes the adoption of CBDCs conducive.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing