Jeremy Allaire, CEO of Circle, Shares Thoughts on FTX – Binance Saga

Jeremy Allaire, the CEO and founder of Circle – the issuer of dollar-based stablecoin USDC, has posted on Twitter his thoughts on the FTXBinance drama.

The rapid collapse of FTX, and the need to beg for a bailout by Binance, has called into question the entire crypto industry. While all markets have struggled in the recession, crypto platforms have stood out for their poor operations and multiple failures. FTX was viewed as a standout from other platforms that stumbled – a belief that has been vaporized in mere hours.

Allaire, who has a traditional financial services background, pointed a finger at poor operational controls in regards to FTX’s near-death experience:

“Lack of transparency, lack of counter-party visibility, and project treasuries and balance sheets anchored in speculative tokens are root causes.”

He said as well:

“An inordinate amount of the “value created” during the past bull market was almost entirely speculative in nature, and the focus on utility often an afterthought, or entirely nonexistent.”

Allaire also blamed “offshore regulatory arbitrage” for creating “global hydra companies” that “often act with impunity.”

He said the lack of regulatory clarity has encouraged users and projects to take more risks.

At the same time, he re-affirmed the viability of USDC, which is “regulated, fully backed by US government treasury bonds and cash, with detailed transparency, and entrusted with the leading asset managers and custodians in the world.”

Allaire called on the industry to move on from “the speculative value phase of crypto.”

 

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