According to Circle CEO Jeremy Allaire in an appearance on CNBC on Wednesday, the collapse of FTX was “sort of a shock” and highlighted the lack of public access to the company’s balance sheet.
If no one buys FTX and its assets, Allaire said, it would leave a “giant hole” that would be “far worse” than what investors and markets are worried about right now.
In addition, Allaire was asked what it would mean for the crypto market as a whole if Binance pulled out of a preliminary deal to buy its troubled rival.
According to Allaire, “there was a perception that FTX was one of the strongest firms in the space.” He also stressed the “importance of having a clear regulatory structure” around digital assets in the U.S., noting that the exchange’s rapid decline is evidence of this.
The fact that FTX is based outside of the United States and has a low level of financial transparency, according to Allaire, makes it less visible than it would be in a setting with regulated markets.
