Peter Smith, CEO and co-founder of Blockchain.com, told CNBC on Thursday that the FTX collapse is a tragedy and a failure of governance.
Smith believes that the downfall of Sam Bankman-Fried's company will lead to a shift back towards regulated institutions and individuals holding their own private keys.
One of the few assets in the world that you can custody yourself, and I think we are going to see people increasingly move back to that model as well as move to a model of trusting regulated companies in the space.
Smith said that companies that rely on private funding should not face major obstacles in getting investors' money. He said that FTX was not a market leader or a key player in the space, despite the fact that it had been valued at $32 billion. Smith was confused by the fact that investors were excited about the company which had very low levels of governance.
As a result of the FTX situation, more investors will focus on corporate structure in the future.
Smith said that the play was a Silicon Valley momentum one.
According to some analysts, a greater focus on regulated entities could be beneficial to the company. The relatively small number of job cuts that were announced on Thursday were related to the overall market conditions and need to manage costs and cash as a public company, according to Brian Armstrong, CEO of the company.
The SEC Commissioner told CNBC that the American public needs to be careful. When you give someone your token and they go down, you are going to stand in line at a bankruptcy court and they may be taking your token without proper disclosure. If it is one to one back, and there is good disclosure, you will be protected against fraud, manipulation. The securities laws are that way.
I am not going to speak to any platform, but I will say that you have these rules and the laws are clear, but do not assume that these firms are complying.
As a public company, concerns aboutcryptocurrencies are not an issue, according to the interviewer.
Customer funds are held one to one backed. He said that the company's financial statements are audited by four accounting firms. We are a regulated institution in the U.S. and what happened to FTX is not possible at us.
About a third of all transactions on the bitcoin network have been done by Blockchain.com.
Smith said that the ultimate reality is that you can store your funds on your own private key where you don't have exposure to the outside world. It has been our mission for the last ten years.
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