Blockchain community sees life after FTX collapse, but expects negative sentiment to last a while

Warren De Guzman, ABS-CBN News

Posted at Dec 01 2022 09:44 PM

The first ever Blockchain Festival in the Philippines was scheduled well before the meltdown of the Bahamas-based FTX cryptocurrency exchange in November. 

The event still pushed through, opened by VIPs such as Trade Secretary Alfredo Pascual and Information and Communications Technology Secretary Ivan Uy. It also drew a sizable crowd of blockchain enthusiasts interested in cryptocurrency and NFTs. 

Unfortunately, the billion-dollar FTX scandal still cast a shadow on the event.

E! Entertainment Television Founder, American billionaire Larry Namer is one of the big names to fly in for the inaugural blockchain event. He said he is still a believer in the viability of blockchain. 

“Yes I am confident in the good ones. There is really no regulatory body that is governing it. You have things like this FTX thing which kills consumer confidence in the crypto world, and yeah when it hurts the crypto world, it hurts the blockchain world, it hurts the NFT world. There are some really good NFT projects out there, but you really got to pay attention to them,” he said.

Namer believes the scandal will usher in a new phase for cryptocurrencies, as investors learn to be more discerning and regulators catch up with the technology. 

"There has to be some degree where basically it stops people from committing fraud. You look at the FTX thing, and I am just amazed so many smart people got caught up in that one.”

Nikita Kozlov is the backend lead engineer of 1inch Network, a decentralized finance or DeFi aggregator which allows users to exchange cryptocurrencies at the best possible rates available at the lowest fees available. He believes the FTX scandal will be good for blockchain in the sense that it will help weed out bad actors. 

“Crypto is pretty large. The same as financials. There are a lot of banks in some countries that lose their money. It does not mean that the whole finance (system) is bad. It depends on the case. In crypto there are multiple implementation cases there. I think we definitely need regulation of course, especially for transparency. But it is not that simple,” Kozlov said.

Both Kozlov and Namer still believe in blockchain and its many uses and still see it as a viable option for alternative finance. 

But Kozlov said while regulators catch up, investors will have to be extra careful in this space.

“It is high risk investments, and just you need to understand the risks and take your own research in everything you are doing," he said.

Namer however thinks there will be a stigma from FTX, and it will take some time for the investing public to dip back into the market. 

"I think you are gonna have the ramifications of FTX, I think we are starting to see a few other of the crypto based companies filing for either protection under the bankruptcy laws or bankruptcy itself. So I think you know, probably for the next year consumer confidence is going to be shattered," he said.

Earlier this week, Securities and Exchange Commission Chairman Emilio Aquino revealed they had pushed back the release of long awaited rules for the purchase and trade of virtual assets in the Philippines because of FTX. 

Aquino told ABS-CBN News that they were actually ready to base some of their rules on regulations in the Bahamas, where FTX is registered.