Jess Powell believes that the Terra (LUNA) situation has already done a lot of damage to the cryptosphere’s reputation.
Jess Powell, founder and head of crypto exchange Kraken, thinks the cryptosphere must urgently develop transparency standards because first the Terra (LUNA) situation and now the FTT token and crypto exchange FTX.com create reputational risks for the entire cryptosphere. He believes that the cryptosphere has become even more perceived negatively by regulators in major countries, and that it will be years before this attitude can change.
Powell also said that the cryptosphere includes projects that are initially questionable in terms of financial sustainability, but that are willing to spend significant amounts of investors to promote them. At the same time, investors themselves do not always question the sustainability of the business model, focusing on the fact that first of all, such projects are already generating a significant cash flow.
Powell also laid partial responsibility for the situation with crypto exchange FTX.com and on U.S. congressmen, saying that lawmakers in the U.S. have so far refused to create a “working regime” for crypto exchanges that would ensure proper oversight of them.
This has led to crypto exchanges such as FTX.com being forced to open an office not in the US but in offshore jurisdictions, but Washington should have thought about creating clear rules of the game for the trading platforms as well, given that they operate in the US, among other places.
Kraken is not a company whose shares are traded on a stock exchange, but the current situation with crypto exchange FTX.com, affecting the stock valuation of public trading platforms, suggests that the cryptosphere after this crisis may actually come to work out its operating standards. That could be a positive for cryptocurrency stocks like Coinbase: which is why investment fund Ark Investment Management on Nov. 9 invested into Coinbase stock for another $12.1 million.
The next day, on November 10, Coinbase shares gained 10.74%, outperforming the Nasdaq Composite, which rose 7.35% in a day. One of the investment experts who spoke on CNBC stated about the potential for these stocks to rise 90%, even with the FTX.com situation.