The investment firm Paradigm remains optimistic about crypto- says 'Issues at FTX are precisely ones DeFi can solve'

Key points: 

• Paradigm’s interest in FTX was a small percentage of its total assets and is now written down to $0.
• "Issues at FTX are precisely ones that decentralized finance can solve through increased transparency and security." - Paradigm's executive emphasized. 
  
• He concluded that further months will be tough, but they remain committed to the bright future of crypto. 

Paradigm to FTX Crash, Defi

Paradigm co-founder Matt Huang took to Twitter to explain how the collapse of the cryptocurrency exchange FTX affected his company. Paradigm is a San Francisco-based investment firm focused on supporting crypto and Web3 companies and protocols.

“We are appalled by the revelations by FTX, Alameda, and SBF,” he began. FTX and trading firm Alameda Research filed for Chapter 11 bankruptcy last week. Both companies were founded by Sam Bankman-Fried (SBF), who has stepped down as CEO of FTX.

"The facts are still emerging and there will be many lessons to be learned," Huang added, elaborating:

We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem.

“Paradigm’s interest in FTX was a small percentage of our total assets and is now written down to $0,” the co-founder explained.

“We have never traded on FTX nor held any assets on the exchange. We have never invested in related tokens such as FTT, SRM, MAPS, or OXY,” he clarified.

Huang was previously a partner at venture capital firm Sequoia Capital, which recently slashed its FTX investment to $0. “The liquidity crisis poses a solvency risk for FTX,” the venture capital firm noted.

Paradigm executives emphasize:

The blowup of FTX has caused some to question crypto’s value. But the issues at FTX are precisely ones that decentralized finance can solve through increased transparency and security. Crises such as this one help to clarify the true merits of what we’re all building towards.

“The weeks and months ahead will be difficult times for cryptocurrencies, but we remain bullish on the potential of cryptocurrencies and are committed to working towards a positive future that we know is within reach,” he concluded.

Kraken CEO Jesse Powell said the damage to the crypto industry is massive and will take years to reverse. Binance CEO Changpeng Zhao compared the FTX fiasco to the 2008 financial crisis. He warned that the collapse of competing exchanges would have knock-on effects. Former U.S. Treasury Secretary Larry Summers compared FTX to Enron.