The recent New York federal court case involving the collapse of FTX, a major cryptocurrency exchange, has sparked discussions about the impact of such events on the cryptocurrency industry. However, according to Molly White, a software engineer and cryptocurrency analyst, the outcome of the case is unlikely to have a significant effect on the trajectory of cryptocurrency.
White, who is known for her sarcastically named blog “Web3 Is Going Just Great,” argues that cryptocurrency has proved to be resilient despite previous plunges in value and scandals. She believes that the speculative nature of cryptocurrency, along with its cycles of hype and volatility, will continue regardless of the outcome of the FTX case.
“I don’t think a case like this will force any change,” White said.
She suggests that the reason cryptocurrency remains attractive to many investors is its lightly regulated nature. Unlike traditional finance, cryptocurrency offers a way to make quick money without the complex rules and regulations. Many investors view the cryptocurrency industry as capable of self-regulation and believe that technology can solve any problems that may arise.
However, White points out that this techno-solutionism is naive and fails to address the deeper societal policy issues that exist. While some attempts have been made to regulate cryptocurrencies, such as stablecoins and existing securities laws in the United States and European Union, White remains skeptical of these regulations. She believes that they may not be stringent enough to ensure the stability and integrity of the industry.
In response to scandals like the FTX collapse, some players in the cryptocurrency industry have embraced regulation. However, White views this as a sign that the regulations may not be adequate and suggests that stricter oversight may be necessary.
Overall, White acknowledges that cryptocurrencies are likely here to stay but believes that their prospects as a replacement for the financial industry may diminish. Instead, she envisions a future where cryptocurrency is appropriately regulated, similar to the gambling industry, and people continue to enjoy speculating on its price.
While the outcome of the FTX case may not bring about immediate changes, White suggests that lawmakers and regulators may observe the case and learn from the mistakes that occurred. This could potentially lead to better oversight and regulation of the cryptocurrency industry in the future.
In conclusion, the New York federal court case involving FTX is unlikely to have a major impact on the trajectory of cryptocurrency. The industry has proven its resilience and continues to attract investors despite its volatile nature. However, there may be a need for stricter regulation and oversight to ensure the stability and integrity of the cryptocurrency market in the long term.
