video update<\/a>, Charles Hoskinson says that the disintegration of FTX may push lawmakers to bring about new regulations for the digital assets industry.<\/p>\nHoskinson says that FTX was not a failure of crypto itself, but of flawed and centralized infrastructure around it.<\/p>\n
\u201cCrypto didn\u2019t fail. People failed. People in positions of trust. At the end of the day, as much as we like to believe in the principles of cryptocurrency, this had everything to do with people putting their money in centralized exchanges and organizations entrusting centralized businesses to do something on their behalf.<\/em><\/p>\n That\u2019s the very industry we\u2019re trying to get rid of with the cryptocurrency space. Unfortunately, it\u2019s going to now be conflated and there\u2019s a very high possibility that the fallout of this will be new legislation, hopefully decent legislation, but there\u2019s a strong possibility that it won\u2019t be.\u201d <\/em><\/p>\nHoskinson says the damage FTX caused will cascade down, greatly affecting other crypto firms. He says the fallout could ulimately lead to American crypto companies having to follow stringent new regulations.<\/p>\n
\u201cThis is unfortunately the consequence when you have people who don\u2019t know what they\u2019re doing get into positions of power and trust and create cascading and catastrophic damage. This is just the tip of the iceberg. If you look at the financial relationships that FTX had, as we go down the list, it could create a cascade of insolvencies and unfortunately crypto doesn\u2019t get a bailout, but our competitors do\u2026 <\/em><\/p>\nWe don\u2019t get [bailouts]. We just get the privilege of cleaning up the mess and then being blamed for it and having to deal with the financial outcome ourselves. Now, I do believe this is not going to kill cryptocurrency. I do believe that our industry will be much stronger in the future, and I do believe that our best days are still ahead of us\u2026<\/em><\/p>\n[FTX] could end up being the straw that breaks the camel\u2019s back, and changes, at least in the short to mid term, how cryptocurrencies work in America. In particular, it changes the appetite lawmakers have for giving the industry a pro-growth freedom mandate. <\/em><\/p>\nWe could look at a world where non-custodial wallets are no longer permitted in the United States. We could look at a world where every cryptocurrency except for Bitcoin is labeled as a security and forced to comply with onerous regulations which will rob them of liquidity.\u201d<\/em><\/p>\n