The CFTC is investigating the defunct cryptocurrency exchange FTX and has raised concerns about institutional investors' care and responsibility for the loss of user monies.
The lack of recordkeeping coupled with “an auditor no one’s ever heard of” forces the CFTC to ask questions about the mindset of the institutional investors. In this regard, Romero asked a series of questions:
“How is that possible? So do they turn a blind eye to it? Were they just distracted by this promise of innovation?”used trust as a marketing technique to gain investor confidence. However, Romero echoed the current investor sentiment while stating that “We know now that that's not true.” As a result, she believed that the VCs backing FTX ignored the red flags when it came to due diligence, further questioning their involvement.
“So was there some conflicts that prevented them from really paying attention to the due diligence and the facts that they were uncovering?” asked Romero while concluding the topic at hand.Shark Tank star and investor Kevin O’Leary, who once supported FTX, warned against the possible fall of unregulated crypto exchanges. He stated:
“If you’re asking me if there’s going to be another meltdown to zero? Absolutely. One hundred percent it’ll happen, and it’ll keep happening over, and over and over again.”
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