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Financial failures are not uncommon within the global economic landscape.
However, thanks to the many advancements made by the banking industry over the last couple of decades, it is unacceptable to ignore these improvements and recreate past mistakes in the context of today’s burgeoning Web 3.0 / blockchain economy.
For example, when something in the world of traditional finance goes wrong, more often than not, it is the bank that is at the receiving end of the blame.
But when it comes to digital assets, where does one point the finger?
That said, 2022 has been tumultuous for the cryptocurrency industry, due to the slew of insolvencies witnessed by the market.
One collapse, in particular, that everyone is talking about is that of FTX, a cryptocurrency exchange that, before its downfall, was valued at a whopping $32 billion.
Its founder, notorious Sam Bankman-Fried, was considered the crypto person of the year.
The trading platform’s downfall resulted in its clients losing approximately $8 billion, raising the question – “When will unregulated custodians involved with firms like FTX start to be held accountable when things go wrong with an exchange?”
The crypto market needs to change its ways ere’s why
It is no secret that most banks have, at one point or other, employed poor governance practices, such as improper account management, co-mingling of funds, custodial failures and more.
The blurring of the fine line between banking and securities was the reason behind the housing crisis witnessed a little over a decade ago.
Despite these lapses, the TradFi (traditional finance) sector has continued to enjoy the confidence of the masses.
When talking about the crypto sector, things are very different, since most entities operating within this space are unregulated, even though they manage billions of dollars in user funds.
And while these firms are under no legal obligation to protect their client’s money, it is only fair that they would be accountable when things go awry.
Narrowing down on the FTX saga, the exchange and sister firm Alameda Research illegally siphoned hundreds of millions of dollars when the company collapsed.
The reason given for the move was to protect an estimated $400 million from bad actors.
However, the fact that key personnel who had resigned from the firm including founder Sam Bankman-Fried (SBF) and CTO Gary Wang could move so much money irked investors…
Click Here to Read the Full Original Article at The Daily Hodl…
