Kraken CEO discusses the impact of FTX’s failure and says the damage to the crypto-currency industry is huge and will take years to repair

The CEO of crypto-currency exchange Kraken has highlighted the impact of FTX’s failure on the crypto-currency industry. After listing multiple “red flags“, the leader stressed: “The damage here is enormous … We will work to undo this for years“.

Crypto Exchange CEO Kraken on the damage done to the crypto industry by the FTX bankruptcy.

Crypto exchange Kraken CEO Jesse Powell shared his thoughts on the collapse of FTX in a series of tweets Thursday. FTX filed for Chapter 11 bankruptcy protection on Friday.

“This is a massive setback“, he began. “Our good and trusting nature makes us easy targets for crooks … It’s not about aiming high and missing. It’s about recklessness, greed, self-interest, inordinate pride, sociopathic behavior that causes a person to risk all the hard-won progress this industry has made over a decade for his own personal gain.“

Powell listed a number of red flags from FTX. Referring to former FTX CEO Sam Bankman-Fried, who stepped down after the bankruptcy filing, Jesse Powell explained that the first red flag is “to act like you know everything after showing up to battle eight years late.“. The second red flag is to spend “9 figs to buy political favors“. The third is “to be too eager to please DC“, and the fourth is to make “huge ego buys, like nine-figure sports contracts“. The next red flag is “to be a media darling, to seek out feature stories“. Finally, there is also “EA [Effective Altruism] the virtue signal” and the FTT token, he detailed.

Jesse Powell opined, “We let clowns ride under our banner while they sell us out for their own interests. We give them the power to speak for us, but they have not earned the privilege. When they blow themselves up, it is our house, our reputation, our people who suffer the consequences.“The Kraken leader stressed:

The damage here is enormous. The implosion of an exchange of this magnitude is a gift to bitcoin haters around the world… We will be working to fix this for years to come.

Venture capitalists, the media, the “experts have failed“, he continued, adding that people have “burned their own reputation“by vouching for individuals, projects, and enterprises on which they had not done their due diligence. “Retailers look to you, assuming you have done your job. You have a duty to be critical and not to give excessive praise“, he noted.

“Don’t trust. Check“, the Kraken boss then stressed, elaborating:

U.S. lawmakers and regulators also have some responsibility. You have pushed this activity overseas because you have refused to put in place a workable regime under which these services could be offered in a supervised manner. Enforcement is wrongly focused on the right convenient players overseas.