Annus Horribilis for Crypto: Bitfinex Publishes Open Letter on Tough Year for Digital Assets

In an understatement, Bitfinex’s CTO (as well as Tether’s) Paolo Ardoino, has labeled 2022 as the annus horribilis for crypto markets.

From multiple bankruptcies, hacks, and regulatory challenges, the digital asset sector has had a challenging year. As it looks today, the path remains murky.

Ardoino states:

“The collapse of FTX, the meltdown earlier in the year of Terra Luna and companies like Three Arrows Capital, as well as numerous major hacks of Decentralised Finance platforms, have led to billions in customer losses, shaking confidence in digital assets and blockchain technology. As well as significantly eroding trust, it’s not surprising that recent events have prompted many to question whether our industry has any future at all.

As a company that’s lived, evolved, and grown stronger through multiple downturns in the market, we believe the future for our industry is brighter now than ever. Indeed, the multiple crises we have seen this year will in hindsight mark an inflection point separating the strongest companies that bring real value to their customers and those that do not.”

Acknowledging that 2022 has uncovered unethical behavior and perhaps a fair amount of incompetence, Ardoino remains optimistic for the future. Looking forward to 2023, Ardoino believes there is light at the end of the tunnel, and Bitfinex is determined to work with the industry to further this sector of Fintech.

“Bitfinex is committed to working to further the development of the digital asset industry in a responsible way and we welcome regulation that supports a flexible, risk-based approach to consumer protection. Crucially however, regulation should not stifle innovation and ingenuity. It is important that all parties take a measured and balanced approach to avoid excessive regulatory generalisation, and recognise that the isolated activities of bad actors should not overshadow all the good work that is being done by groups like Bitfinex. Innovation is the hallmark of the industry and it should be nurtured and encouraged so that more value can be brought to communities around the world from Bitcoin and blockchain technologies. Done right, regulation can protect the interests of customers, while allowing the industry to thrive.”

Congress is expected to move first on stablecoins and then, perhaps, a broader regulatory approach for digital assets. But the collapse of FTX has caused policymakers to reflect a bit more on what kind of rules are needed to give the digital asset sector a chance. Time will tell whether non-security digital assets are viable or, like the SEC claims, all digital assets are securities and should be regulated as such.

 

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