FTX CEO Sam Bankman-Fried (SBF) has issued a dire warning that some cryptocurrencies have real crash potential. In a conversation with CNN, SBF warned that a significant portion of cryptocurrencies are empty. SBF further emphasized that such idle currencies represent a very small fraction of cryptocurrencies by market cap or volume. However, judging by the number of assets, they represent a significant portion.
Sam Bankman Fried shared his comments on the cryptocurrency market
Sam Bankman Fried believes that empty crypto assets are forming a pattern. According to the SBF, there are often too many assets that are primarily speculative with no use cases. But the core consists of assets that have real use. SBF’s beliefs can be supported by evidence. There are currently over 20,000 crypto assets listed on CoinMarketCap. Despite this, Bitcoin and Ethereum contribute the majority of the value.
Bankman-Fried also stated in a recent Bloomberg interview that he believes many crypto projects are Ponzi schemes whose value only comes from people putting money in. Given the current market conditions, SBF’s comments on crypto assets seem significant. As Cryptokoin.com reported, crypto platforms such as Celsius, Three Arrow Capital, BlockFi and Voyager suffered from difficulties. These platforms either suspended all activities or declared bankruptcy. Recently Celsius was sued by a former wealth manager for allegedly being a Ponzi scheme. Similarly, CoinFlex’s new rvUSD token has been labeled as a Ponzi scheme by many experts.
What is the role of stock markets in this market?
SBF believes exchanges have a role to play in tackling Ponzi schemes. He stressed that efforts should be made to distinguish and offer tokens that are healthy for the ecosystem. He cautioned, however, that recognizing Ponzi schemes is often not easy, and no tradeoff can be perfect in this regard. SBF has already made efforts to protect certain crypto platforms from the bear market. FTX startups gave BlockFi a $250 million line of credit.
Meanwhile, other exchanges like Binance have done the same. It announced that they will save several crypto platforms. Justin Sun, the founder of Tron, also announced that he will donate $5 billion to cryptocurrency platforms. Meanwhile, the cryptocurrency space has not changed much in the last 24 hours. Bitcoin, the largest cryptocurrency, experienced a 0.9 percent increase in value. Ethereum (ETH), which followed, gained 0.7 percent.
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