An in-depth analysis of Genesis, GBTC, DCG, and more
This report acts as a follow-up to Crypto Finance’s “The Collapse of FTX, a post mortem report” and analyses the contagion effects which have ensued due to the fall of one of the largest centralized exchanges in the cryptocurrency space. Large market participants, such as Genesis, Grayscale, and DCG, and retail-focussed cryptocurrency companies, like Gemini and BlockFi, have suffered severely from the Luna crash of May and the FTX crisis of November.
Over-leveraged trading strategies during the 2020-2021 bull market have ultimately led to organizations collapsing on top of each other. The values of crypto assets and blockchain technology are not the root cause of the current market environment, but the financial engineering of the current crypto asset ecosystem has significantly weakened it.
To restore trust, enforce regulation and build resilience in the industry, this report suggests applying a hybrid regulatory set-up, which takes full advantage of frameworks found in the traditional financial world (auditing, risk management, governance, KYC), while leveraging the unique capabilities offered by public blockchains (transparent transaction monitoring, Proof of Reserves and Liabilities, crypto compliance).
Please find the full report by clicking here.
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