BlackRock CEO Larry Fink argues that the development of FTX's eponymous FTX Token was the primary factor in the company's downfall.
Tokens from centralized exchanges like Binance Coin and Cronos from rival exchange Crypto.com account for about $57 billion of the $862 billion total market cap for cryptocurrencies.
The CEO of BlackRock, the biggest investment management company on the planet, feels that FTX's demise was caused by the creation of its own FTX Token, which became centralized and thus at variance with the "core premise of what cryptocurrency entails."
Larry Fink, the $8 billion investment firm's chairman and CEO, made the statement on Nov. 30 at the 2022 Dealbook Summit hosted by the New York Times. He further said having thought that FTX's self-developed token was to blame for the firm's demise, he still thinks that cryptocurrencies as well as the blockchain technology that powers them will be revolutionary.
Approximately $57 billion of the $862 billion overall market valuation for cryptocurrencies is made up of centralized exchange tokens like Binance Coin and Cronos from rival exchange Crypto.com. Fink stated that the majority of these firms managing the tokens really aren't going to be present and that he remained doubtful about these tokens.
Fink stated subsequently in the discussion with Andrew Sorkin of the New York Times that although he feels that exchange-traded funds (ETFs) were the driving force behind the prior development of trading, he predicts that smart contracts would be responsible again for another.
He moves on to explain several of the possible advantages of smart contracts, arguing that doing so would alter the investment environment because "immediate payment" on distributed ledgers that list each buyer and dealer of shares would indeed be feasible instead of relying on financial institutions.
Read More: Crypto lawyer: BlockFi is most likely to pay the SEC first.
Fink acknowledged that BlackRock had invested $24 million in FTX, but he would not comment on claims that they, along with other venture capital companies like Sequoia Capital, had not conducted adequate research on FTX.
Two years ago, BlackRock participated actively in the cryptocurrency market. On Nov. 3, it made an announcement declaring that it will be handling the reserve money of USD Coin (UDSC) issuer Circle. On September 27, it declared the debut of an ETF that will expose shareholders to 35 blockchain-related businesses.
