FTX's implosion ‘is a massive setback’ for crypto, Kraken CEO says

FTX’s implosion and what’s come to light over the past few days “is a massive setback” for the cryptocurrency industry, Kraken CEO Jesse Powell has opined.

Although Powell says crypto will put this episode behind it, the damage that such a huge project failing has done to the market is huge.

In a tweeted commentary on Thursday, as more and more bad news about FTX and SBF unfolded – including that FTX’s balance sheet has an $8 billion hole – Powell said:

“This industry is made up of so many smart, passionate, open-minded, welcoming people, with genuine humanitarian interest at heart. I know we’re going to get past this. True believers will not be deterred. But, this is a massive setback. I’m really trying to control my rage.”

Crypto shouldn’t let ‘clowns’ speak for it

The Kraken chief, who is set to exit his CEO role at the exchange in early 2023, said that having “clowns” under the crypto banner has them auctioning off the industry in pursuit of self-gain. When things go wrong, it’s the crypto “house” that gets burned.

Multiple prominent crypto names are piling down the list of people the industry trusted, but who’ve only been responsible for the pain suffered by millions of people. There have been so many sad days for crypto in 2022 and Powell sums up the scenario thus:

“We give them power to speak for us but they haven’t earned that privilege. When they blow themselves up, it’s our house, our reputation, our people which bear the brunt of the damage.”

As for what FTX’s collapse could do or mean for crypto, the Kraken CEO says it could be the excuse “haters” have all been waiting for. It will take years for crypto to undo the damage that’s been wrought by SBF and others.

According to Powell, VCs that wrote huge checks for FTX and other investment deals, the media that ‘hyped’ SBF and experts that all ignored the red flags have contributed to this damage.

10/ Please, as an industry, we have to recognize the signs, believe people when they show/tell us who they are (the first time), shame them and shut them out. If we don't they'll take us down with them when they inevitable destroy themselves.

Don't trust. Verify.

— Jesse Powell (@jespow) November 10, 2022

“The damage here is huge. An exchange implosion of this magnitude is a gift to #bitcoin haters all over the world. It’s the excuse they were waiting for to justify whatever attack they’ve been keeping in their back pocket. We’re going to be working to undo this for years.”

After Binance decided it was not worth it trying to buy off Sam Bankman-Fried’s collapsing FTX business, the bloodbath across the market picked up fresh momentum. Bitcoin came close to dropping below $16,000 and Ethereum tested support at $1,200.

The FTX token was down more than 37% in the past 24 hours, with 90% of its value now lost in the past seven days.