According to Ava Labs CEO Emin Gun Sirer, the implosion of the crypto exchange FTX last November bruised the reputation of the crypto industry in terms of trust and legitimacy. Sirer says the damage that the exchange’s ex-CEO Sam Bankman-Fried has done is immeasurable.
The Ava Labs boss revealed that he was a computer science professor at Cornell University, educating students, including politicians, about blockchain technology. However, he now thinks Bankman-Fried’s acts dented the goodwill he had built over those years.
As crypto prices declined last summer, Bankman-Fried’s reputation ascended to new heights as the fallen crypto guru rushed to save struggling blockchain companies.
However, his reputation swung in the opposite direction in November when his exchange collapsed. The firm filed for bankruptcy after encountering a bank run on the platform fueled by a sharp drop in the FTT token, forcing FTX to admit that it didn’t hold enough one-to-one reserves of client assets and, therefore, could no longer process further withdrawals.
Bankman-Fried Faces New Charges
Also read:Bankman-Fried got arrested last December and is currently facing eight charges ranging from money laundering to wire fraud. The former billionaire pleaded not guilty to all the charges early last month. Moreover, new charges were leveled against him last week. Bankman-Fried is accused of making illegal political donations amounting to tens of millions of dollars.
Sirer says Bankman-Fried was not scrutinized because of the image he had cultivated. The Ava Labs CEO explains that the FTX founder spent so much on marketing to the point that the world started treating him as a genius who couldn’t be questioned.
While Sirer recognizes that several retail investors were affected by the FTX’s collapse and the resulting industry contagion that hit other crypto firms, he says the damage would have been greater if Bankman-Fried had remained unchecked for longer.
Ava Labs CEO Says Firm’s Token Had No Ties With SBF
Further, Sirer says AVAX was never part of the ‘Sam coins’ (tokens promoted by the FTX ex-CEO, such as FTT and Solana, which were reportedly inflated in price).
Solana saw a significant drop after the downfall of FTX due to its connection with Bankman-Fried, but it has since recouped the losses.
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