Tallahassee experts weigh in on ‘crypto winter’ following FTX collapse
TALLAHASSEE, Fla. (WCTV) - The stunning collapse of major cryptocurrency exchange FTX has sent shockwaves through what some believe is the future of finance.
The company filed for bankruptcy last week, and Tuesday, lawyers for the company indicated there might be more than a million creditors in the case- ten times more than initially reported.
It’s a messy situation that may only be getting messier, and it has investors in digital currency wondering what comes next.
Tallahassee software analyst Edgar Raymond said he’s taking a cautious approach to his crypto investments following a turbulent year.
“I have taken a little bit of a step back in regards to my aggressiveness in buying cryptocurrency,” he said.
Raymond didn’t have money in FTX, which serves as a centralized exchange for crypto, or a middleman. He’s more of a purist when it comes to crypto, keeping his coin close to the chest. He keeps it in ‘cold storage,’ a decentralized location where he has direct access to his investments.
“I am the manager of my own keys, I’m the manager of my own bank,” he said.
It’s already been a tough year for crypto values, from Bitcoin and beyond.
When another crypto exchange, Binance, called off a deal to purchase FTX, investors started to realize there was trouble beneath the surface. Soon, they ran to withdraw funds, a move FTX couldn’t withstand. The company filed for bankruptcy shortly after.
FSU College of Business Associate Professor Guangzhi Shang is an expert in crypto and NFTs.
He said any successful business needs both reputation and regulation, and the crypto world has seen very little of the latter. The FTX scandal may be the spark to spur action from lawmakers.
“A good approach is to watch and see,” he said. “Now we’re watching and we saw something. We got to do something.”
Raymond said the centralized exchanges could use reigning in but hopes the core decentralized nature of blockchain technology will remain free of “overregulation.”
Shang used the term ‘crypto winter’ to describe the current state of affairs, implying that a ‘crypto spring’ may be on the eventual horizon.
Both men don’t see the FTX scandal as a fatal blow to crypto’s future.
“I think it’s very good, in the long term it will be very good,” Shang said, believing it’s a chance to clean up crypto.
“I hope with a little bit of regulation, that will calm a lot of investors down to the point where it can stabilize and see a lot more of the positivity that crypto has to provide,” he said.
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