During the World Economy Forum, Circle’s CEO Jeremy Allaire stated that there is a high chance of another FTX-like insolvency in the cryptocurrency market reoccurring in 2023.
Downturn For Crypto In 2023?
Allaire stated that the crypto industry might yet face another swamp of insolvencies like was witnessed in 2022 with the collapse of FTX exchange.
FTX, one of the top cryptocurrency exchanges before the crash incident, faced a major liquidity crisis in 2022, causing a huge catastrophe throughout the crypto area and incurring significant losses for investors.
The incident shone the spotlight on the stability and security of the cryptocurrency market, and stressed the need for better regulations in the space.
Allaire however remains optimistic and possesses a bullish stance towards technological advancement in the space this year.
He strongly believes with the adversaries the space witnessed in 2022, better technological advancement would be put in place to curb and fight a recurrence.
Allaire, who is also involved in digital asset management and trading, has proposed to give the market a chance since it is still emerging and growing.
He has however acknowledged that there are still many pressing matters to deal with when it comes to hacks, fraud and volatility in the space.
Also read:Need For Clarified Regulations
Allaire believes we are still going to encounter these problems moving forward in this direction, but he however employs firms and regulators to cooperate together to address these issues and ensure they are curbed at the early stage, restoring security and stability to this technology and the space.
He also highlighted the need for investors protection, saying they should be lectured about various investment risks, what to do and what not to do in the space before investing or trading.
Also he stressed that firms and organisations have a duty to investors, which is to be transparent in their activities and properly safeguard investors’ assets from theft and cybercrimes.
The CEO also said that 2023 will focus on very particular things which involve: Layer 1 blockchain, Layer 2 providing scalability solutions and heightened privacy and security.
Despite the possible risk the industry may face this year, many industry players believe that the space has a promising future to hold onto, and has the potential to cause a worldwide evolution.
Allaire finally addressed the statutory condition of cryptocurrencies, stating that the U.S. government has to regulate and characterize cryptocurrencies as either securities or commodities to provide for smooth regulations on these assets.
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