Jesse Powell, the founder and former CEO of centralized exchange Kraken, has taken to Twitter to air his thoughts on the bombshell of FTX’s liquidity crisis this week.
“I know we’re going to get past this,” Powell reassured his readers, “but this is a massive setback. I’m really trying to control my rage.”
Powell then dove straight into a ten-tweet broadside that doesn’t explicitly namecheck FTX or its CEO Sam Bankman-Fried, although it’s clear from multiple references that he has the ailing exchange and its management firmly in his crosshairs.
“An exchange implosion of this magnitude is a gift to Bitcoin haters all over the world,” he wrote. “It’s the excuse they were waiting for to justify whatever attack they’ve been keeping in their back pocket.”
In the lengthy broadside, Powell implicitly called FTX and Sam Bankman-Fried “clowns” and “con artists” and blamed the exchange’s downturn on “recklessness, greed, self-interest, hubris, sociopathic behavior.”
He also predicts the contagion will spread, as it did back when Terra’s collapse triggered a domino effect of bankruptcies that wiped out crypto investment firm Three Arrows Capital and lenders like Celsius, Voyager, and several others.
However, FTX and Bankman-Fried weren’t Powell’s only targets. He blamed venture capital investment firms for throwing money at projects without performing due diligence. Powell rounded off his thread with a list of what he saw as red flags about FTX.
9/ Red flags: * acting like you know everything after showing up to the battle 8 years late * 9 figs buying political favor * being overeager to please DC * huge ego purchases, like 9-fig sports deals * being a “media darling”, seeking out puff pieces * EA virtue signaling * FTT
It’s been a long week in crypto and it’s only Thursday.
In the short period since the true extent of FTX’s financial troubles became known on Tuesday, when fellow exchange Binance proposed a bailout (then backed out), several crypto companies stepped forward to disavow any connection to the beleaguered FTX, including Coinbase, Circle, Tether and Maple Finance.
On the other hand, several companies have had to face the music. On Wednesday, crypto-focused financial services company Galaxy Digital announced it had a $76.8 million exposure to FTX.
American VC firm Sequoia capital today disclosed that it was writing off its $150 million exposure to the exchange.
The world’s largest asset manager, BlackRock, is also a notable investor in FTX.
Stay on top of crypto news, get daily updates in your inbox.