Cardano (ADA) creator Charles Hoskinson warns that the FTX crypto exchange fiasco is likely to have negative implications for the digital asset industry.
In a new video, Hoskinson says that while the liquidity issues facing FTX will not directly affect the Cardano ecosystem, they will “cause problems” for the crypto industry.
“Actually speaking, this [FTX’s insolvency] it does not directly impact the Cardano ecosystem. But as members of the broader cryptocurrency space, this is likely to cause problems for all of us.”
According to Hoskinson, the possible failure of FTX is likely to bring more scrutiny to the cryptocurrency industry.
“In particular, there is the case that FTX has been lobbying hard in Washington, DC Its failure could change the political landscape in unpredictable ways…
The problem here is that if we see more systemic failures, there could be a belief of more regulatory scrutiny or more draconian laws being passed to allow for that scrutiny.
The failure of FTX could result in something that could in turn severely damage the industry or in many cases abroad the US crypto industry. So this is not a minor event.”
On Binance’s reported intentions to acquire FTX, Hoskinson says that the plan’s collapse would be catastrophic for the crypto industry.
“It’s hard to know what’s going to happen next. If the Binance takeover goes through, there is a chance that the markets will stabilize and things will look good. Or at least calm. And we can move on and continue to heal as we did before this event.
If the acquisition fails, there is the potential for a series of cascading failures to occur, and due to lack of transparency, it is very difficult to know how deep these tentacles reach. And it is very possible that other companies that depended on FTX could also fail.”
Binance yesterday pulled out of a deal to acquire FTX, according to a report by the Wall Street Journal.
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