Key players in the crypto industry continue to weigh in with their opinions of what triggered the FTX collapse and its effect on the broader digital asset market. The CEO of BlackRock, one of the leading asset management firms in the world, also expressed his sentiment by stating that the now-collapsed crypto exchange is responsible for its downfall.
Larry Fink, BlackRock’s CEO, noted that the reason for the crash of the FTX exchange was due to the management’s undue practices in its operations. Fink added that the decision to create a governance token for FTX is the beginning of the platform’s fall as it represents a clash of interests.
In addition, BlackRock’s boss explained that FTX’s centralization goes against the foundational principle of cryptocurrency, which is decentralization. BlackRock has a market cap of $8 billion and is among the top asset managers globally, providing exceptional fund custody and management to institutional investors.
In a discussion with the New York Times on November 30, the BlackRock boss disclosed that crypto assets and accompanying technology are revolutionary to the financial ecosystem.
Other centralized platforms like Binance and Crypto.com, through their tokens BNB and Cronos, make up more than $56 billion of the total $863 billion of the crypto industry market cap. However, Fink stated that he is yet to be convinced by their long-term sustainability.
Also read:Furthermore, the CEO added that only a few top centralized platforms would be active in the future. In a separate discussion with the New York Times journalist Andrew Sorkin, Fink revealed that exchange-traded funds (ETFs) drove the previous investment phase.
But he believes that tokenization will fuel the next one. “I believe that the next round of market evolution and the subsequent evolution of securities will be widespread through tokenization.”
He then highlighted the advantages of tokenization by stating that it would revolutionize the financial system such that traditional banks would no longer be viable in influencing individuals’ investment drives.
The FTX Exposure
In the interview, the CEO of the world’s leading fund manager revealed that BlackRock is also one of the numerous firms with significant exposure to the collapsed crypto exchange. He admitted that his firm has a $27 million investment in the Sam Bankman-Fried-led crypto platform.
However, he declined to say anything about the ongoing rumors that the asset manager and other venture capital companies failed to conduct due diligence on FTX before plunging funds into the exchange.
Since 2020, BlackRock has been among the active institutional players providing custody services to several crypto exchanges. Reports indicate that early last month, BlackRock teamed up with the USDC stablecoin issuer, Circle, as its new reserve fund manager.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.