Ava Labs CEO notes Sam Bankman-Fried’s impact on the industry
Ava Labs – 2022 saw the crypto market crash, and it fell into further chaos when the top crypto exchange platform FTX collapsed.
The collapse created a domino effect, creating a wave of financial strains on several crypto companies exposed to FTX.
It also resulted in several companies filing for bankruptcy, closure, or frozen assets.
Emin Gün Sirer, the founder and CEO of Ava Labs, described the damage Sam Bankman-Fried, the founder of FTX, as vast.
The news
Last fall, the FTX collapse added salt to the wound to an already beaten down industry.
Its reputation, primarily the industry’s legitimacy and trust, was tarnished by the implosion of the once-mighty crypto exchange.
“The damage that Sam [Bankman-Fried] did is immeasurable,” said Sirer.
“All that goodwill that we built over many, many years of hard work is just usurped by some guy who comes in and puts on this boy genius act.”
The Ava Labs CEO said he watched the digital assets industry over the years grow from nothing into the titan it is today.
He also revealed that he worked hard at Cornell University as a computer science professor to provide more education and insight around blockchain technology.
Sirer has also held workshops and shed some light on cryptocurrency for politicians.
Emin Gün Sirer described how the thought of Sam Bankman-Fried’s impact on the crypto space set the industry back, keeping him up at night.
The Ava Labs CEO said he was conscious of shifting tides in regulatory circles, noting that it could be dangerous for people and organizations involved in crypto.
SBF
In the summer of 2022, the crypto market crashed, and digital asset prices spiraled downwards.
It was during that time that Sam Bankman-Fried, the now-infamous FTX founder, rose to prominence.
His reputation hit new heights, earning the 30-year-old entrepreneur comparison to John Pierpont Morgan.
The crypto crash was similar to the 1907 economic panic, and Morgan was instrumental and almost godlike in that he could decide which firms would survive and which would die.
For months, SBF’s reputation was immeasurable, but everything changed in November.
Downward spiral
As FTX collapsed, Sam Bankman-Fried started losing his reputation as the golden boy of crypto.
The company then filed for bankruptcy following a run on the exchange sparked by a steep drop in the FTT token, FTX’s native token.
The bankruptcy filing revealed that the crypto exchange didn’t have one-to-one reserves of customer assets.
As a result, FTX could not accommodate withdrawals.
Read also: Spotify Web3 playlist to benefit NFT projects
Arrest
In December 2022, Sam Bankman-Fried was arrested.
He was later charged for a series of crimes, from fraud to money laundering.
SBF allegedly misappropriated billions of dollars worth of customer funds.
Despite the mounting evidence, Sam Bankman-Fried pleaded not guilty.
The FTX founder would later receive additional charges, namely illegal political donations.
The donations cost tens of millions of dollars.
Scrutiny
As a result of his antics, SBF received comparisons to Bernie Madoff by former partners.
Anthony Scaramucci, the managing partner at Skybridge, described SBF as a friend before his betrayal.
“I thought Sam was the Mark Zuckerberg of crypt,” said Scaramucci. “I did not think he was the Bernie Madoff of crypto. I got it wrong.”
Meanwhile, the Ava Labs CEO said the lack of scrutiny Sam Bankman-Fried received was down to the image he worked hard to put on.
Sirer pointed out how he cultivated his tousled hair and spent so much on marketing to shift the world’s perspective so he can be viewed as a genius.
Aftermath
According to Emin Gün Sirer, the aftermath of the FTX collapse will depend on creating a constructive dialogue with regulators.
The Ava Labs CEO underscored the failure of several crypto companies and projects caught in the company’s web of lies.
Furthermore, Sirer said that it’s essential to clarify that FTX’s fate was not a failure of crypto itself but the failure of a centralized entity.
Silver linings
Emin Gün Sirer is now searching for a silver lining following the conundrum FTX set up.
Although he is aware of the damage and resulting contagion to other businesses, the Ava Labs CEO believes the damage would have been worse if it was left unchecked.
“If we had given Sam a couple more years of runaway, it would have been worse,” said Sirer.
He also recognized how SBF’s antics put the spotlight on crypto.
“I no longer have to educate people on what Bitcoin [or] Ethereum is.”
Furthermore, Emin Gün Sirer expressed relief that Ava Labs was never a “Sam coin.”
“We were never a Sam coin, and therefore we stayed out of that whole craziness,” said the Ava Labs CEO.
“And we’re just thanking our lucky stars for it.”
Image source: Coincu News
