NewsNation
Joshua Eferighe, Marni Hughes
(NewsNation) — As the first of what are expected to be multiple lawsuits over the collapse of cryptocurrency exchange FTX has now been filed in court, Kurt Wuckert, Jr., chief bitcoin historian at CoinGeek.com, joined “NewsNation Live” on Monday to discuss the implications.
Of his many insights, Wuckert Jr.’s assessment of the crypto economy as a whole, calling it “largely a scam,” was telling, especially being that he is an entrepreneur with experience in business management and cybersecurity.
“I, myself, am an advocate for blockchain technology and bitcoin but the way it’s being used for almost nothing but fundraising schemes and this kind of nonsense makes us all look bad,” Wuckert Jr. said.
“So, in my opinion, the takedown of FTX and some of their partners … might give the opportunity for people to stop thinking about it is so exclusively as an investment and actually look at what the underlying technology can do for business. And I think that’s a really important step to take.”
It’s been an epic fall from grace for the company once seen by many to be a can’t-miss investment. FTX’s founder, Sam Bankman-Fried, was even compared to Warren Buffett by Forbes at one point.
But the company filed for bankruptcy protection Nov. 11 in Delaware, leaving their estimated one million customers and investors facing huge losses. FTX says it owes $3 billion now to its top 50 creditors.
Additionally, the Department of Justice and the Securities and Exchange Committee are now investigating the currency exchange. And authorities in the Bahamas, where FTX is based, are also looking into what led up to the company’s bankruptcy.
“Well, it means a whole lot of things: The space has been struggling with a professionalism problem for a long time and I think FTX shows that whatever facade was put on top of it, really is just a real problem,” Wuckert Jr. said.
“There’s a massive creditor — everyone from mom-and-pop and all the way up to some of the biggest firms in New York and California — and the implications are going to be broad. I would venture to guess that we don’t actually see the full scale of this thing for another year or two as this gets unwound.”
Wuckert Jr. also spoke on whether Sam Bankman-Fried, the former FTX CEO, could see charges.
“It’s starting to look that way. Some of this at first looked like incompetence. But more and more, it’s looking more and more like a concerted effort to conceal funds.
“These alleged hacks and things that are happening, how convenient that a hacker was able to drain just as they were under investigation. There’s also a little bit of indication that the Bahamian officials might be involved, although that’s pure speculation at this point.”
Check out the entire interview above.
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