FTX’s collapse is still causing reverberations across the crypto market, with the latest crypto news being Genesis’s lending business halting customer withdrawals.
Kyle Bass, the founder and CIO of Texas-based asset management firm Hayman Capital Management, says FTX’s collapse could just be the beginning of even more turmoil and failures in the crypto sector.
The Hayman Capital exec, who also criticised the crypto marketplace as a ‘riverboat gambling” and where players are just trying to move off the world’s best currency – the US dollar – believes crypto as an industry should brace itself for more bankruptcy filings.
As Invezz reported, FTX filed for bankruptcy last week, and in the past few days, with court filings suggesting the beleaguered company could have as many as 1 million creditors. In the meantime, multiple companies have come under pressure, including Crypto.com that faced a ‘bank run’ as jitters of what the next big collapse could be, hit investors.
Commenting on FTX’s implosion during an interview with CNBC’s ‘Squawk Box’, he said:
“I think what we are seeing here is the beginning of the unravelling of the whole idea that there is a better currency out there than the hegemonic positions of the world. I think what happened at FTX is, again, just a harbinger of things to come.”
Bass also believes most financial institutions don’t want anything to do with crypto, suggesting that ‘people are getting what they deserve.” Noting that there “there’s no room in the world for any other currency,” he posited:
“What is Tether? What is this $66 billion behemoth that has its headquarters at a small bank in the Bahamas, that’s literally a hop skip and a jump from Sam Bankman-Fried’ lair? I haven’t been able to find a dealer who says they do business with Tether.”
The latest crypto industry events no doubt has the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC) and other regulators laser-focused on the sector. But while Bass says regulators could help bring crypto under greater scrutiny, that’s not the main thing that should be happening now.
According to him, this is the time for law enforcement to dive “head-first” into investigations of the fraud and other illegalities that have happened and greatly impacting American investors.
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