The CEO of the world’s largest asset management firm, BlackRock, believes that the reason FTX failed is that it created its own FTX Token (FTT), which was centralized and therefore at odds with “the whole foundation of what cryptocurrency is.”
Larry Fink, who serves as president and CEO of the $8 billion investment company, made these remarks during the New York Times Dealbook Summit 2022, held on November 30, and He added that while he believes FTX’s self-created token caused his downfall, he believes that cryptocurrency and the blockchain technology that underpins it will be revolutionary.
Centralized exchange tokens such as Crypto.com’s BNB (BNB) and Cronos (CRO) account for more than $57 billion of the $862 billion total crypto market capitalizationaccording to CoinMarketCap. Fink suggested that he remained skeptical of these tokens and believed that “most of these companies [que controlan los tokens] They won’t stay.”
Later, in the interview with the New York Times journalist Andrew Sorkin, Fink said that while he sees exchange-traded funds (ETFs) as the cause of the above investment performance, he believes tokenization will be behind the next one, pointing out:
“I think the next generation of markets, the next generation of securities, will be security tokenization.”
Next, expanded on some of the potential benefits of tokenization, suggesting that it would change the investment ecosystem, as instead of trusting banks, “instant settlement” would be possible on distributed ledgers showing each owner and seller of values.
“Think instant settlement [de] bonds and shares, without intermediaries; We’re going to lower commissions even more drastically,” he explained.
Fink admitted that BlackRock had a $24 million investment in FTX, but declined to speculate on the allegations that they and other VC firms like Sequoia Capital had failed to do due diligence when investigating FTX:
“Right now we can make all the value judgments that there seemed to be some misbehavior with major consequences. […] if you look at the Sequoias of the world, they have had incredible yields over a long period of time. I’m sure they did their due diligence in investigating.”
BlackRock has been an active investor in the cryptocurrency industry since 2020. The last move of him was revealed on November 3, when announced that it would manage the reserve fund of the issuer of USD Coin (UDSC) Circle.
In the meantime, On Sept. 27, he announced the launch of an ETF that gives investors exposure to 35 blockchain-related companies.
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