Lesson to be Learnt after FTX Crisis! Says Ethereum Co-Founder

Ethereum co-founder Vitalik Buterin has said that there are lessons to be learned from the FTX crisis

The FTX crisis contains lessons for all of crypto, according to Ethereum co-founder Vitalik Buterin. Buterin emphasized the stability of crypto's so-called underlying technology, the blockchain while acknowledging the heavy impact of the meltdown of the Sam Bankman-Fried crypto empire.

In the days since FTX filed for bankruptcy, entities ranging from BlockFi to Genesis to Gemini have been hit by the fallout. Despite the upheaval, Buterin said blockchain base layers and decentralized finance protocols worked "flawlessly."

"What happened at FTX was of course a huge tragedy," Buterin told Bloomberg. "That said, many in the Ethereum community also see the situation as a validation of things they believed in all along centralized anything is by default suspect," he said. These beliefs also included putting one's trust in "open and transparent code above individual humans," he added.

Buterin, like many others in crypto Twitter, has in recent days weighed in on how crypto exchanges could help shore up confidence in their businesses. The downfall of Bankman-Fried has led to an industry-wide self-reckoning over transparency and risk.

Buterin, like many others in crypto Twitter, has in recent days weighed in on how crypto exchanges could help shore up confidence in their businesses. The downfall of Bankman-Fried has led to an industry-wide self-reckoning over transparency and risk.

Week three of the FTX crisis began on a down note for crypto investors as new questions arose following the collapse of the digital-asset exchange. The value of all cryptocurrencies dropped to about $788 billion from $820 billion in the 24 hours leading up to 4 p.m. in New York, according to CoinMarketCap.com, a 3.9% decline.

Bankruptcy filings over the weekend indicated that FTX had racked up $3.7 billion of losses prior to this year, a period that was widely considered to be profitable for the business.

Separately, the hacker that stole as much as $477 million of FTX assets as the exchange was slipping into bankruptcy apparently moved about $200 million to 12 or more digital wallets on Monday after converting ether tokens to renBTC through the RenBridge service. Ren, acquired by FTX affiliate Alameda Research last year, has been used as a money-laundering service, according to blockchain analytics firm Elliptic.

The Grayscale Bitcoin Trust remained at a steep discount to net-asset value after its manager said on Friday that it would not provide cryptographic proof of the bitcoin reserves backing the investment vehicle. The fund closed at 57% of NAV, slightly better than the 55% last week, but its net-asset value fell to $14.42 from $15.20, based on generally accepted accounting principles, as the market price slipped to $8.28 from $8.33.

Bitcoin itself was down 2.7%, falling to $15,826—its first trip below $16,000 since Nov. 9, according to Nomics—while Ether skidded 3.1% to $1,105. Solana's sol token fell 8.2%. FTX is known to have been a significant investor in the currency.