The Galaxy Digital boss said that the cryptocurrency industry is currently facing a confidence deficit due to recent events.
Mike Novogratz, the CEO of Galaxy Digital, pointed out in an interview with UKTN on Wednesday that there is a crisis of confidence in the market. According to Novogratz, the market is unlikely to recover any time soon.
“Our industry has failed to self-regulate,” Galaxy Digital CEO Mike Novogratz said of cryptocurrency. https://t.co/YRU4JuDQA7 pic.twitter.com/x6iWF0Bbpp
— UKTN (@UKTN) November 23, 2022
Novogratz stated that;
“It’s always about building trust with your customers. Right now we have a confidence deficit. People think there’s a black swan around every corner and everyone else is, you know, a sociopath who says one thing and does another.”
The collapse of FTX came after documents revealed that the crypto exchange was using customer funds for investments without their consent. When asked about it, Novogratz said;
“As an exchange or company, you are supposed to separate customer accounts from your money. You may not lend money from customers unless you have permission to do so. If you look at companies like BlockFi and Celsius, it is clearly explained to users that their money would be lent out. However, that is not the case with cryptocurrency exchanges.
The CEO of Galaxy Digital complained that the crypto industry has not regulated itself. He suggested that companies dealing with the money side of crypto, including Galaxy Digital, will be regulated.
Novogratz added that the technical side of crypto also has its own regulatory challenges, such as KYC (Know your customer) and AML (Anti-Money Laundering). He added;
“It’s all about building trust with your customer, and right now we’re dealing with a lack of trust. People think there is a black swan around every corner, that everyone is a sociopath who says one thing and does another.”
The bankruptcy of FTX is the second largest loss of funds in the history of crypto, behind the collapse of LUNA.
In an interview two weeks ago, Novogratz said time would tell if FTX’s Bankman-Fried is guilty of financial crimes.