Not all cryptocurrency exchanges are managed like the now-defunct FTX, according to Mike Novogratz, CEO of the cryptocurrency investing firm Galaxy Digital. Mike Novogratz is a wealthy investor and has a sum of experience.
Novogratz claimed that not all cryptocurrency executives are out to steal their users’ money in an interview with CNBC’s Squawk Box on December 15. He also claimed that not all cryptocurrency platforms are run similarly to how FTX was. He stated:
“It’s quite risky to assume that there will be many more just because there is one black swan. There will be criminal organisations everywhere, and sociopaths will run these groups. Simply said, that is not true.”
A “black swan” risk in the context of cryptography is the potential occurrence of an unanticipated event. Nassim Nicolas Taleb, a crypto-critic, originally popularised the phrase in his book “The Black Swan: The Impact of the Highly Improbable.”
The cryptocurrency entrepreneur pointed out that while not all exchanges adhere to every guideline, others continuously strive to do so and offer strong protections. Added him:
“Regulators are attacking several exchanges in some way due to [know your customer/anti-money laundering] infractions, frequently in the past. They didn’t have nearly as good of precautions against who was utilising their exchange when they first started as they have today. However, I don’t believe a thief is hiding your money under every rock.
On the other hand, Novogratz forecast that politicians would ultimately need to loosen their strict fiscal and monetary policies, which would raise the price of cryptocurrencies in the future. He further noted that industrial use of cryptocurrencies was growing despite generally unfavourable circumstances.
“You’re seeing new methods that consumers may engage in Bitcoin and the crypto market, even in this dreadful bear market of crypto,”
With the recent collapse of FTX, previously the third-largest cryptocurrency exchange in the world, user confidence in centralised crypto platforms has been damaged, which is why Novogratz made his statements.
Early investigations into FTX and its discredited founder Sam Bankman-Fried reveal that the exchange was engaged in unprecedented fraud and deception.
According to reports, SBF was detained by The Bahamas’ authorities on Monday after US prosecutors formally charged him with a crime. The Southern District of New York has charged SBF with eight criminal offences.”
“He further said that it also includes conspiracy to commit wire fraud and stealing client cash. SEC has also accused SBF of “orchestrating a scheme to defraud equity investors in FTX.”
As reports regarding purported issues at the platform continue to spread like wildfire, it is noteworthy that Binance, the biggest cryptocurrency exchange in the world, has also seen a surge of withdrawals over the past few days. In particular, the exchange had withdrawals totalling over $3 billion on Tuesday.
From the above discussion, every crypto exchange doesn’t work the same. Moreover, trust anyone of them except FTX if you want to be careful.