The collapse of FTX, according to Ethereum co-founder Vitalik Buterin, has demonstrated once again that the problem is people, not technology.
In the aftermath of the FTX collapse, Ethereum co-founder Vitalik Buterin has spoken out, offering his thoughts and some positives from one of cryptocurrency’s biggest black swan events.
Buterin stated in a Bloomberg interview on November 20 that the collapse of FTX has lessons for the entire crypto ecosystem.
He acknowledged that the underlying stability of distributed ledger technology and the technology that powers the crypto asset economy is not in doubt.
Buterin called the FTX collapse a “huge tragedy,” but added that it reaffirmed many in the Ethereum community’s stance on centralization.
He went on to say that this ethos includes putting open and transparent code ahead of humans. Furthermore, Buterin published a guide to having a “safe CEX” with proof of insolvency over the weekend.
He claimed that instead of relying solely on “fiat methods” such as government licenses, auditors, corporate governance, and background checks on people running exchanges, exchanges could create “cryptographic proofs that show that the funds they hold on-chain are sufficient to cover their liabilities to their users.”
The exchange’s problems are thought to have stemmed from the exchange’s use of customer deposits for other purposes.
Following a large influx of withdrawal requests earlier this month, the exchange found itself unable to meet withdrawal demand with its current liquidity.