The crypto industry is doomed to repeat the mistakes that led to the collapse of FTX, a top Wall Street short seller has warned.
Cryptocurrencies were plunged into crisis in 2022 after one of the biggest trading platforms FTX went bankrupt.
Thousands of people lost a combined £7billion after boss Sam Bankman-Fried funnelled customer deposits into a separate company he owned. This turned out to be one of biggest ever US financial frauds and led to his conviction last year.
But Marc Cohodes, former hedge fund boss, has said an even larger crisis could be brewing as regulators fail to implement protections for consumers.
‘I don’t think we have learned any lessons. It is worse than before,’ he told the Mail.
Concern: Cryptocurrencies were plunged into crisis in 2022 after one of the biggest trading platforms FTX went bankrupt
‘Bitcoin is raging. Rules and regulations haven’t changed.’ His comments come after US regulators decided to approve so-called exchange-traded funds (ETFs), which look to make crypto trading even more accessible.
The value of bitcoin has surged nearly 50 per cent in six months and is trading at around $42,900.
And Cohodes said there is a reluctance on both sides of the Atlantic to examine how Bankman-Fried built the now-bankrupt cryptocurrency exchange, and stop something similar happening. ‘Nobody wants to dig into how we got there with FTX.
The money behind crypto and its exchanges are big and dirty. Money forces people to look the other way,’ he said.