Started by Bitcoin, Nov 17, 2022, 11:40 am
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Investment firm Paradigm is still optimistic about crypto’s potential following the collapse of FTX. “The blowup of FTX has caused some to question crypto’s value. But the issues at FTX are precisely ones that decentralized finance [defi] can solve through increased transparency and security,” the firm’s co-founder emphasized.
Paradigm co-founder Matt Huang took to Twitter to explain the impact cryptocurrency exchange FTX’s collapse has on his company. Paradigm is a San Francisco-based investment firm focused on supporting crypto and Web3 companies and protocols.
“We are shocked by the revelations about FTX, Alameda, and SBF,” he began. FTX and trading firm Alameda Research filed for Chapter 11 bankruptcy last week. Both companies were founded by Sam Bankman-Fried (SBF), who has stepped down as the CEO of FTX.
“Facts are still coming to light, and there will be many lessons to learn,” Huang added, elaborating:
We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem.
“Paradigm’s equity investment in FTX constituted a small part of our total assets and has now been written down to $0,” the co-founder detailed.
“We never traded on FTX and did not have any assets on the exchange. We have never been investors in related tokens such as FTT, SRM, MAPS, or OXY,” he clarified.
Huang was previously a partner at venture capital firm Sequoia Capital, which also recently marked its FTX investments down to $0. The VC firm noted that “a liquidity crunch has created solvency risk for FTX.”
The Paradigm executive emphasized:
The blowup of FTX has caused some to question crypto’s value. But the issues at FTX are precisely ones that decentralized finance can solve through increased transparency and security. Crises such as this one help to clarify the true merits of what we’re all building towards.
“The coming weeks and months will be a tough time for crypto, but we remain optimistic about crypto’s potential and are committed to building towards the positive future we know it can enable,” he concluded.
Kraken CEO Jesse Powell said the damage to the crypto industry is huge and will take years to undo. Binance CEO Changpeng Zhao has compared the FTX fiasco to the 2008 financial crisis. He warned of cascading effects from the rival exchange’s collapse. Former U.S. Treasury Secretary Larry Summers compared FTX to Enron.
What do you think about the comments by the Paradigm co-founder? Let us know in the comments section below.
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