The CEO of Blockchain.com, Peter Smith talked if the power of blockchain technology could be harnessed to track Bankman-Fried’s fund flows. The main priority, as of now, is to recover assets on The Claman Countdown. Similarly, the Blockchain.com CEO even mentioned how blockchain technology can or can’t be successful in doing so. Smith talked about how it becomes difficult to track money as soon as it moves off the chain into a banking system. This is possibly the most challenging aspect for blockchain-based firms.
— Blockchain.com (@blockchain) December 21, 2022
On-chain analytics might play a considerable role in locating missing FTX funds. Despite that, there is a greater possibility of limitations. As long as the funds in the crypto ecosystem are concerned, on-chain analytics would prove to be useful. This is mainly because these would enable liquidators to untangle the FTX mess. According to the Blockchain.com CEO, these are records that can’t be modified or changed under any circumstances.
Apart from that, things that resulted in the loss of FTX, as well as customers, can be traced easily on-chain. Similarly, the Blockchain.com CEO added that it would even become possible to identify how much users actually deposited in FTX.
FTX’s Crash and the Way Forward
FTX used to be a popular exchange that often gave tough times to its competitors. Over the course of time, the firm managed to grow considerably and establish a renowned reputation for itself. At its peak, the exchange had millions of users all around the world. However, things took a turn for the worst as FTX was subject to a number of grave issues.
Users of the exchange indulged in rapid selling and the firm did not have enough reserves to meet the demand. As of now, the new CEO, John Ray, claims that mismanagement, poor record keeping, and other issues led to the collapse. Just earlier this month, Bankman-Fried was arrested on charges based on the collapse of FTX.
The situation in the crypto market got out of hand as a result of the collapse. A considerable number of cryptocurrencies ended up losing a chunk of their value. Investors as well as different crypto-based firms suffered heavy losses. The cloud of uncertainty still looms in the crypto market.